Biden does not “forgive” student loans, he unilaterally breaks contracts and shifts responsibility to innocent Americans | texasinsider

It’s a cynical system of buying votes for votes, nothing else

By David Harsanyi

“No money will be taken from the Treasury, but accordingly from the appropriations created by law.” This is what is written in the Constitution. And yet, without any legislation, President Joe Biden is now promising to “cancel” up to $10,000 in student loans per borrower ($20,000 for Pell Grant borrowers), limited to those with annual incomes below $125,000.

Let’s start by pointing out that Biden does not “cancel” or “forgive” any student loans. These are wild euphemisms favored by Democrats and the media.

The debt in question already exists, it has been lent and spent, and those who borrowed the money of their own free will have already received services. This debt is not cancellable.

 

The president did not “forgive” the loans – he unilaterally broke existing contracts and transferred responsibility for payment to taxpayers, many of whom have either paid off their own student loans or never borrowed any money to begin with.

Now, if you’re opposed to repaying a stranger’s loan, that’s too bad. A new batch of IRS agents will be there to make sure you do.

It’s also worth pointing out that capping the loan “forgiveness” to those earning less than $125,000 means absolutely nothing, as most borrowers are early in their careers and have yet to experience the lasting benefits. of a university degree.

The average worker with a bachelor’s degree ends up earning an average of $1 million more over their career (those with an advanced degree $2-3 million more) than a worker with a a high school diploma.

And yet the Biden White House is going to force truckers and employees without a college degree to pay off white-collar loans en route to six-figure salaries.

Now, of course, even if student loan “forgiveness” were a boon to the poor, it would still be completely unconstitutional, moral hazard, counterproductive, and fundamentally unfair. But Biden’s plan — which will cost taxpayers an estimated $300 billion, more than all the illusory “savings” that were to be found in the Cut Inflation Act — is little more than a ploy. buying votes for affluent millennials.

There’s already a list of programs that help the poor pay for college — and most schools charge families in lower economic quintiles less. According to a new study from the University of Pennsylvania, “[b]Between 69 and 73% of the canceled debt goes to households in the top 60% of the income distribution.

Another Brookings study found that 60% of all outstanding school loan debt was incurred by families earning more than $74,000 – those borrowers making 75% of all payments.

 

The 40% of households with the lowest incomes “hold just under 20% of the outstanding debt and only make 10% of the payments”.

By the way, while there is clearly a problem with the skyrocketing costs of higher education, it is a myth that most students who earn a bachelor’s degree face debilitating debt.

According to Brookings, about 30% of undergraduates graduate without any debt and 25% with less than $20,000.

Only 6% of graduates owe more than $100,000.

Half of university debt is held by a quarter of borrowers: those pursuing higher education. That is, Biden is forcing American taxpayers to foot the graduate degree bill.

The government guarantee of student loans has been one of the most corrosive policy ideas in recent history. It has encouraged schools to charge outrageous tuition fees (Yale and Harvard now operate essentially like hedge funds, with massive endowments), encouraged students to go into massive debt by obtaining often useless degrees (there is no there’s no bank on earth that would lend a kid $100,000 to get a degree in, say, journalism), and allowed banks to give out giant loans worry-free.

 

Loan “forgiveness”, which will certainly become an expectation in the future, only exacerbates all these problems.

Not so long ago, Biden admitted he doesn’t have the power to “cancel” student loans “by signing with a pen.” Now his administration is rationalizing this power grab on the faint idea that we are in a national emergency over COVID-19.

Part of me suspects that the administration understands that the president cannot “pardon” the debt, and that the effort will be thwarted by any Supreme Court that adheres to the Constitution. Democrats likely see the issue as a cudgel they can use to further delegitimize the Supreme Court and slam Republicans as an opposing “middle class” aide.

There is no standard that this administration is unwilling to cynically destroy for political power.

David Harsanyi is Editor-in-Chief for The Federalist, is senior editor at The National Reviewand is the author of “Eurotrash: Why America must reject the failed ideas of a dying continent.” Follow him on Twitter at DavidHarsanyi.


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