Tipsheet

Reminder: Biden's Student Loan 'Forgiveness' Scheme Is Illegal and Profoundly Unfair

Guy Benson
Guy Benson  |  April 10, 2024 10:15 AM

President Biden traveled back to Wisconsin on Monday, which must have confused Hillary Clinton. While in the Badger State, the president boasted that he'd decided not to let an adverse Supreme Court decision stop him from pursing a policy of unilateral student loan debt "forgiveness," which is a naked, undisguised, and unlawful 2024 vote-buying scheme aimed at certain younger voters. His previous attempt to arrogate illegitimate power in this way was rejected by the Court.  Round two is just as legally dubious, as the Wall Street Journal's editors explain -- and ask a good question about lawless threats to our republic's instutions:

Mr. Biden’s new plan eliminates accrued interest on loans for some 23 million borrowers. Generous repayment plans that cap monthly payments at a de minimis share of income have caused many loan balances to balloon owing to interest that accrues on unpaid balance. This is a major reason student debt has exploded...Mr. Biden’s previous repayment plans prevent interest from compounding, eliminating the punishment for not making full and regular payments. Now borrowers also won’t have to pay interest they’ve racked up, which could total hundreds of billions of dollars. Wouldn’t Americans love to write off interest that accrues on credit cards too?...The Administration is essentially turning college into an open-ended, taxpayer-financed entitlement by canceling loans on the installment plan. It even boasts that it has already “approved $146 billion in student debt relief for 4 million Americans through more than two dozen executive actions.” That's $36,500 per borrower. It’s good to be the King. 

The Supreme Court ruled last year that Mr. Biden’s cancelation of $10,000 to $20,000 per borrower exceeded his authority under the 2003 Heroes Act, which allows the executive to “modify” loan terms in an emergency. The Administration “modified” loans, Chief Justice John Roberts wrote, in the “same sense that ‘the French Revolution “modified” the status of the French nobility.’” Mr. Biden’s new loan forgiveness is still illegal. The High Court stressed that student loan forgiveness is a major question that requires clear authorization from Congress. But Mr. Biden seems to believe he can jam the courts by automatically forgiving debt before a judge has time to stop him. The White House says most borrowers won’t even have to apply for loan relief. Sometime before the November election, Mr. Biden will simply declare their debt forgiven. That means a future Congress and a President Trump might be unable to undo the lawless act. Where are the press scolds who warn about a President who threatens democracy?

As usual, many on the Left -- very much including journalists -- aren't really concerned with norms, institutions or laws that stand in the way of their ideological project. They harp on these topics when political forces they oppose are seen as undermining 'democracy' or the rule of law, but have little to say when their allies are the guilty parties. In fairness, some don't remain silent. No, they actively and wilfully engage in pro-lawlessness propaganda:


Don't think too hard about how loans work, or how the central feature of such arrangements is paying back the borrowed money, as stipulated in the legally-binding terms agreed to by the borrower. Think about greedy banks, or whatever. Setting aside the illegality of it all, definitely don't think about how unfair a taxpayer backstop for so-called "forgiveness" would be to the huge majority of Americans who hold zero student loan debt:


Why should someone who never went to college contribute in any way to a politician's "forgiveness" of other people's student debt? Why should someone who made responsible choices -- such as eschewing a more expensive school, or working to pay back their own debt -- be on the hook for others' less responsible decisions? It's profoundly unfair. In the aggregate, it's a transfer of wealth from less affluent Americans to more affluent ones, with higher long-term earnings capacity, thanks to their degrees (and if they chose to spend a boatload of money they don't have on degrees that don't enhance their future income prospects, that's on them).  Biden is trying to force working Americans without degrees to bail out disproportionately richer people who signed contracts to pay off education-related loans.  

And for all the hand-wringing about the truly insane explosion of costs in higher education (some colleges are approaching $100,000 per year), the Journal editorial above underscores my point about Biden's maneuver pouring gasoline on that inflation: "The Administration’s plan will encourage colleges to raise costs, especially in graduate programs for which there are no federal loan limits. Who cares if students can’t repay? They will be forgiven one way or another."  But Biden, 81, doesn't care about college costs ballooning out of control.  He does very much care about his shaky re-election prospects.  Then there is this very dumb argument from the administration:

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My response, which -- again -- Team Biden would prefer people not think about:

I'll leave you with this classic (and correct) 2021 banger from Pelosi: