The Biden administration this week began cancelling college loan debt for some Americans. This is their second attempt to do so, the first being struck down by the Supreme Court in a predictable outcome.
But the White House is back, pitching a now more modest program aimed at forgiving between $10,000 and $20,000 in debt for approximately 800,000 people who make less than $125k as an individual or $250k as a household. It is estimated to cost the American people about $39B. It has not been explained how this new version is any more constitutional than the first, but we’ll leave that to the courts to determine ultimately.
The entire enterprise, however, reeks of rent seeking payoffs to political allies and voters for the President’s party alone.
First, the Biden Administration announced this program just before the last Congressional election in an effort to turn out the vote of millennial and younger Americans. Even then-Speaker Pelosi knew - as did everyone else - that the President did not have the constitutional authority to do this. The White House nonetheless announced and forged ahead, likely scoring many votes in the November 2022 election to stave off a Republican wave. Put plainly, it was a gimmick to win votes, but like the dog who caught the car, the Biden administration is now left trying to deliver a promise they knew they could not keep.
Second, the former students who do not wish to pay for their education need to hear this: the American people (#thecountry) did not sell you your education. You bought it from the college, school or university that you attended. If you feel the product that institution sold you (your education) is not worth the amount you agreed to pay them for it (your student loan), then your argument is with the institution you bought it from - not the US taxpayers. The good news is you may have a case:
The truth is that when a big industry like this is subsidized by the federal government, the costs invariably skyrocket. Colleges have added so many new administrators and so many staff that its been reported there are more employees at Stanford than there are students.
Meanwhile, outcomes have suffered. PBS reports that most colleges enroll students who are not prepared for college. And increasingly, colleges are not teaching students what their future employers need. Indeed, one wonders if any one at any university anywhere has seriously asked a question like, “How many Gender Studies degreed people does #thecountry actually need?” Similarly, Elon Musk opined famously that we need more engineering and science students and less financiers and lawyers. Don’t universities and colleges owe it to their students to teach them valuable skills for their future work and shouldn’t those same institutions share in the burden of making it so? This is happening at places like Bloomtech where tuition is guaranteed if you don’t get the job offer you expect. Brilliant.
Third, and most importantly the American people have already helped you get your education: because you couldn’t afford an expensive tuition you were sold by the University, you were given an opportunity to enter into an unsecured loan agreement you would have never qualified for otherwise. You were offered reduced rates, deferred interest and deferred payments to make it even easier for you to succeed. In fact US News lists 13 advantages of a student loan vs traditional loans.
Now, years later, you don’t want to pay? Well neither do the many Americans who never entered into such a loan, or worse, did so and paid those loans off already. Please just pay your debts or work with your university to resolve your claim and leave us out of it.