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WaPo Editorial Board Takes a Blowtorch to Biden's Student Loan Plan

AP Photo/Elise Amendola

Often, you can expect The Washington Post editorial board to act like good Germans regarding Democratic Party policies. They will support them no matter the political environment, but now and then, they rip into liberal policies, and it’s usually not gentle. Joe Biden decided to play his final hand as we approach the end of the 2022 midterm cycle by trying to energize young Americans ahead of Election Day. He offered some student loan debt forgiveness and extended the loan pause instituted by Donald Trump. The critical difference is that Trump’s moratorium was based on when the COVID pandemic was most intense, people were being laid off, and jobs were being cut. The publication noted that the job market for college graduates is strong, with an unemployment rate of less than two percent. Translation: these kids don’t need a bailout. 

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Whether intentional or not, the editorial also ripped into the narrative that the Biden administration was getting inflation under control with the latest tax and spend bill erroneously dubbed The Inflation Reduction Act. The publication noted that the student loan plan was regressive and inflationary and would force the working class, who do not hold higher education degrees, to pick up the tab. If you want to create a political ecosystem from which dozens of Donald Trump-like candidates will sprout, keep pushing student loan forgiveness initiatives. Nothing says ‘class of the working man’ than screwing them over by asking them to cover the loans for the snobby college-educated elite who despise America’s working class (via WaPo):

After weeks of anticipation, Mr. Biden announced he will extend the pause on student loan payments until the end of the year. He will also forgive up to $10,000 for those making less than $125,000 a year — and up to $20,000 for Pell Grant recipients under that income threshold. Both measures are ill-conceived and misdirected.

The loan pause, which President Donald Trump instituted in March 2020, was an emergency measure at a time when people were struggling to find jobs or had to remain home due to the pandemic. Thankfully, the situation is very different today: The unemployment rate for people with bachelor’s degrees and higher is just 2 percent. It’s hard to make the case that college graduates are still facing an unprecedented crisis.

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The loan-forgiveness decision is even worse. Widely canceling student loan debt is regressive. It takes money from the broader tax base, mostly made up of workers who did not go to college, to subsidize the education debt of people with valuable degrees. Though Mr. Biden’s plan includes an income cap, the threshold does not reflect need or earnings potential, meaning white-collar professionals with high future salaries stand to benefit. Student loans, moreover, are a poor proxy for household income: An analysis by policy researcher Jason D. Delisle found that, in 2016, students from high-income and low-income families were just as likely to take on debt for their first year in an undergraduate program — and students from high-income families borrowed the largest amounts.

Mr. Biden’s plan is also expensive — and likely inflationary. The Committee for a Responsible Federal Budget estimates that extending the loan pause to the end of the year would cost $20 billion, while forgiving $10,000 for households making less than $300,000 would cost $230 billion. Together, these policies would nullify nearly a decade’s worth of deficit reduction from the Inflation Reduction Act. Moreover, it is unclear that the 1965 Higher Education Act even grants the president the legal authority to take such a sweeping step, given that it was historically understood to permit only more targeted relief.

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[…]

Mr. Biden’s student loan decision will not do enough to help the most vulnerable Americans. It will, however, provide a windfall for those who don’t need it — with American taxpayers footing the bill.

It’s a line-by-line takedown of why this is an awful policy, which usually happens when an administration reeks of desperation. I’m not convinced that the environment is better for Democrats right now. Biden’s approvals are still in the high 30s to low 40s, and we’re in an economic recession. The buoyed numbers for Democrats will only help candidates in deep blue areas like New York and California. That’s what happens when you’ve become a regional and coastal party. The irony of this Democratic turnaround mirage is that if there were one, it would be because the Republicans are carrying the water. The lack of fundraising and cash on hand in crucial Senate races is inexcusable. The general lackadaisical approach the GOP leadership has taken on the elections in recent weeks has been noticeable and frustrating. The winds are still at the backs of the GOP, but no one is maintaining the sails to keep the party's ship on course. It’s not too late to change course, but we’re heading for rocky shoals unless the Republican leadership gets more hands-on with some of these races and gets cash flowing to them in the final weeks for critical ad buys. Looking at you, Mr. Scott from Florida. 

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