Just when we thought we had seen the most idiotic actions possible from the White House, student loan debt cancelation is announced. This is the most unfair, illogical, political, partisan, and inflationary government overreach in the history of the presidency. It is purely and simply placing financial obligations of the wealthy elite on the backs of poor and middle class citizens in order to increase Democratic votes.
Penning his name under yet another executive order, Biden gave a minimum of $300 billion of taxpayers’ money to some 43 million student loan borrowers. It is the most expensive presidential executive order in history. It will completely pay off the loans of 20 million of those borrowers and make a big dent in the balance of the rest. Total student debt in America is estimated at $1.75 trillion–an amount equal to over a third of the national annual budget and $412 billion more than all automobile loans.
Student loans from the government amount to 92% of all such loans. One-third of all students take out these loans, but over 50% of graduate students depend on them. Therefore, most of the debt to be canceled will be for the highest income earners in the country. The cancelations are capped at those individuals earning $125,000, but, if they are married and filing jointly, they can have a combined income of $250,000 and still have their loans paid off by the taxpayers. So, what it boils down to is most of the taxpayers’ money will go to benefit those who attained the highest levels of education and, therefore, have the highest paying jobs.
And what will this cost each taxpayer? The National Taxpayers Union estimates the ten-year average cost to each taxpayer will be over $2,000. Married taxpayers filing jointly will add over $4,000 to their tax returns.
The unfairness of this is blatantly obvious and shameful. Low and middle income hourly wage earners will be paying for the college expenses incurred by the most wealthy of our nation. Those who couldn’t afford to go to college but didn’t want the debt will now pay for those who borrowed for success and wealth. Those who avoided college debt by working their way to their degrees will now pay for those who breezed through on loans without working. Parents who sacrificed financially to pay for their children to go to college will now have to pay for children of other parents who didn’t sacrifice. Parents and graduates who have paid off their loans will now have to pay off the loans of others who weren’t as diligent.
The justification given for this unjustifiable action is that COVID and inflation have made this debt unbearable for the debtor graduates. Yet these graduates have been exempt from any payments since March of 2020 due to COVID. So, where is the unbearable burden? That exemption has made the graduates less impacted by inflation than those who are paying for mortgage, auto, and credit card loans, none of which has been exempted or canceled. Furthermore, the loan cancelation will worsen inflation by releasing additionally money into the economy. Colleges will inflate their tuitions even more knowing students can now afford bigger loans. The absurdity of this executive order is surpassed only by the absurdity of the real reason for it. Oh, I failed to mention, it is unconstitutional. Only Congress can forgive government loans.
The real reason for this preposterous edict is to gain political advantage for Democrats. It is yet another desperation attempt to reduce the anticipated wave of Republicans taking over Democratic seats in the House and Senate in November. The Biden administration is betting that many of the 43 million beneficiaries of the loan forgiveness will register and vote for Democrats in ’22 and ’24. A disproportionately high percentage of women and black graduates, whom the Democrats are frantically trying to hold on to, have the larger loan balances.
We can only hope enough voters will understand what is really happening here to ensure this Robin Hood reversal of taking from the poor and giving to the rich will backfire as a political maneuver.