Student debt forgiveness is a ‘morality issue’: Forbes
Forbes Media editor-in-chief Steve Forbes questions the morality of canceling student debt and outlines the economic consequences Americans will face.
The Biden administration is trying once again to save its tanking poll numbers by writing a blank check to student loan borrowers using Americans’ pocketbooks.
Nearly every pandemic relief program has expired as the economy, which the president repeatedly touts as growing at the fastest pace in four decades, recovers and COVID restrictions move further into the rearview mirror.
Americans are finally returning to their everyday lives, balancing the responsibilities of work and family. Yet, according to the president and Democrats in Congress, it is essential that taxpayers continue to fund the largest and most regressive transfer of wealth to the upper-class in modern history, to the tune of $5 billion every month.
BIDEN'S PLAN TO CANCEL STUDENT DEBT ISN'T DEBT FORGIVENESS, IT'S DEBT FOR ALL
Since March 2020, no federal student loan borrower, regardless of income or ability to work, has been required to make a student loan payment – not a single penny in two years.
These deferments were intended to be a safety net at the height of the pandemic. Two years later, the deferments have turned into a $150 billion spending spree predominately benefiting lawyers, doctors, and bankers who racked up their debt in graduate school.
In fact, the repayment pause – which the White House sees as a shining achievement of its commitment to fairness and equity – provides bachelor’s degree holders a mere ten cents in relief for every dollar provided to doctors. That extra $150 billion in unnecessary national debt makes it that much harder to find funding for COVID therapeutics or larger Pell Grants for low-income students and adds the hidden tax of inflation and higher debt for future generations.
Now, facing a stalled legislative agenda and an inflation crisis exacerbated by his administration’s disastrous policies, President Biden is doing what’s politically expedient and extending, for a second time, the "final extension" of the repayment pause and proposing to cancel tens of thousands of student loans for 44 million borrowers.
BIDEN CANCELING STUDENT DEBT WOULD MAKE INFLATION WORSE, EXPERTS WARN
By caving to progressives, he is breaking his promise to over 100 million taxpayers without student debt who are subsidizing this boondoggle. President Biden is grasping at straws and putting politics over responsible policy.
The left has argued for the repayment pause and advocated for abolishing student borrowers’ obligations to taxpayers on the grounds of anything and everything from "economic, racial, and gender injustice" to climate change.
By caving to progressives, President Biden is breaking his promise to over 100 million taxpayers without student debt who are subsidizing this boondoggle.
Yet, when in the position to actually legislate, House and Senate Democrats are (un)surprisingly quiet on student loan debt. Rather than do their jobs, top Democrats are asking the president to do their dirty work for them, calling for an additional extension through the end of the year and debt forgiveness by executive fiat.
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The administration justifies this elitist handout arguing that borrowers are simply not ready to pay their monthly bills. And progressives back this flawed argument by citing absurdly biased polling data from a group whose mission statement is to cancel student debt while ignoring the data that further relief is unwarranted – such as the 2.9 percent unemployment rate of college graduates and the less than 1 percent of private borrowers needing emergency relief.
FILE - President Biden speaks about the severe weather that impacted at least five states and left widespread devastation at the Chase Center in Wilmington, Del., Saturday, Dec. 11, 2021. (AP Photo/Carolyn Kaster)
The most troubling excuse for mass cancellation and this permanent pandemic pause touted by progressive policymakers is that it mitigates the impact of the resident’s inflation crisis.
Low-income households are hit hardest by inflation and are the least likely to hold a college degree. Economists across the political spectrum agree that the repayment pause has exacerbated inflation – Larry Summers included.
In fact, a recent analysis found that extending the repayment pause through the end of the year would easily push inflation above 9 percent. Flooding the economy through loan forgiveness with another trillion and a half dollars won’t ease inflation pressures either. And the single mother of three paying nearly double at the pump and struggling to put food on the table for her family isn’t interested in taking on monthly payments for a Harvard MBA graduate.
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So why is President Biden doing this? Simply put, he is placing politics and poll numbers above his fiscal and moral responsibilities.
Seven in ten Americans are indifferent at best about this administration as we head into primary season. Desperate times call for desperate measures, and Uncle Joe is banking on the left’s ideologues to save Democrats from a disastrous midterm election, taxpayers be damned.
Republican Richard Burr represents North Carolina in the United States Senate.