“The Biden administration is canceling $39 billion in student loan debt for more than 804,000 borrowers, just weeks after the Supreme Court declared unconstitutional the president’s broader student-loan forgiveness program. Democrats say forgiving student loans is important to motivating their base to turn out in the 2024 election, while Republicans accused Mr. Biden of trying to circumvent the nation’s highest court for political gain,” reports the Washington Times:
Republicans reacted angrily to the administration’s so-called fixes to the loan programs, coming so soon after the Supreme Court’s ruling.
“The Biden administration’s blatantly political attempt to circumvent the Supreme Court is shameful,” Rep. Virginia Foxx, North Carolina Republican and chair of the House Education and Labor Committee, said in a statement. “The Biden administration is trampling the rule of law, hurting borrowers, and abusing taxpayers to chase headlines. This president is dead set on ruining our postsecondary education financing system for a few votes next November, taxpayers and the rule of law be damned.”
The action on Friday underscored Mr. Biden‘s effort to make student-debt relief a pillar of his reelection bid in 2024. Under Mr. Biden, the Education Department has forgiven more than $116 billion in federal debt for more than 3.4 million students.
Rep. Ayanna Pressley, Massachusetts Democrat, said Mr. Biden still needs to deliver the “transformative relief” of his larger plan that was shot down by the Supreme Court.
On June 30, the Supreme Court stopped the Biden administration from writing off $500 billion in student loans at taxpayer expense, in Biden v. Nebraska, because that exceeded its powers under the HEROES Act. In response, President Biden denounced Republicans and the Supreme Court, and promised to eventually write off student loans all over again, this time using a different statute, the Higher Education Act of 1965.
The Supreme Court’s ruling against Biden was expected by most observers. Some of them accused Biden of currying favor with young voters by promising student loan forgiveness that he knew was illegal and would be struck down, thus giving them false hope. Biden sought to deny this, saying “I didn’t give any false hope. The Republicans snatched away the hope that they were given.”
But that was dishonest on Biden’s part. Earlier, he himself had admitted he lacked the power to forgive student loans en masse. The president said of student loan cancellation during a 2021 CNN town hall, “I don’t think I have the authority to do it by signing with a pen.”
Other Democratic Party leaders used to admit that Biden lacks the power to forgive student loans, the very ones denouncing today’s Supreme Court decision. On July 28, 2021, “then-Speaker of the House Nancy Pelosi explained: ‘People think that the President of the United States has the power for debt forgiveness. He does not. He can postpone. He can delay. But he does not have that power. That has to be an act of Congress.”
As journalist Charles Cooke notes, “Biden knew this was illegal. Everyone knew this was illegal. That he tried to do it anyway, in violation of his oath of office, remains a monumental disgrace.”
The $39 billion in student loan relief canceled by Friday’s action will cost about $120 for every man, woman, and child in the United States. It will cost far more than operating the entire Department of Commerce.
Canceling student loan debt is “regressive and unfair,” says Katherine Abraham, a former adviser to Obama who served as Commissioner of the Bureau of Labor Statistics during the Clinton administration. As Greg Price points out, “Only 37% of Americans have a 4-yr college degree, only 13% have graduate degrees, and a full 56% of student loan debt is held by people who went to grad school. Biden’s plan to cancel it would be like taking money from a plumber to pay the debt of a lawyer.” Even the liberal Washington Post called Biden’s student-loan bailout “a regressive, expensive mistake.”
Student loan forgiveness also is inflationary. Jason Furman, chairman of President Obama’s Council of Economic Advisers, who called Biden’s plan “reckless.” Furman says “Pouring roughly half trillion dollars of gasoline on the inflationary fire that is already burning is reckless.” Biden’s student loan forgiveness will increase inflation, inequality, tuition, and the national debt.
Writing off student loans will encourage colleges to jack up tuition, by making it more attractive to take out big loans to cover college tuition. When students are willing to borrow more to go to college, colleges respond by raising tuition. The Daily Caller notes that “each additional dollar in government financial aid translated to a tuition hike of about 65 cents,” according to the Federal Reserve Bank of New York.
