Is Biden About to 'Cancel' Student Loans?

|
|
Posted: Apr 27, 2022 10:20 AM
Is Biden About to 'Cancel' Student Loans?

Source: AP Photo/Carolyn Kaster

After taking heat from those on the left flank of his party for not embracing their calls for the federal government to "forgive" student debt — that is, reward mostly upper-class Americans who made poor financial decisions while saddling all Americans with more debt — President Biden is dropping hints that he may be looking to begin the process of wiping away at least some student debt.

In a meeting with members of the Congressional Hispanic Caucus this week, Biden suggested that he would again extend the pause on student loan repayment beyond it's current August end-date in addition to using executive powers to "cancel" the debt of some borrowers.

As CBS News explains:

President Biden is looking at different options to forgive an unspecified but substantial amount of federal student loan debt — a move that would thrill some of his most loyal supporters and financially strapped students nationwide, but is a departure from campaign pledges to provide limited relief.

The president shared his plans during a 90-minute White House meeting Monday with members of the Congressional Hispanic Caucus, participants in the exchange tell CBS News. The move could affect more than 43 million borrowers who hold more than $1.6 trillion in federal student loan debt, the second-largest debt held by Americans, behind mortgages.

And in Tuesday's White House press briefing, Jen Psaki confirmed that President Biden was looking at "other executive authority options" to cancel debt — due to the proposal being unable to make it through the House or Senate where Biden's party does technically have majorities, albeit small ones. 

President Biden already extended the pause on student loan repayments that were schedule to restart in May, an action that contradicts his administration's claims that the economy has been built "back better" under his 15 or so months in office, as Townhall covered here

Earlier in April, Senate Majority Leader Chuck Schumer (D-NY) claimed that President Biden was more open "than ever before" to using executive power to erase the loan balances that were taken out willfully with knowledge that the funds would need to be paid back. It looks like Schumer may have been right. 

Biden — and more urgently Democrats in Congress — need something to offer to voters if they want to prevail in November's midterms. Most of Biden's agenda hasn't made it through Congress as Democrats' razor-thin margins in the House and Senate have meant moderate Democrats are able to prevent the passage of his radical policies. But with student loans, Biden and Congress' radical Democrats have apparently spotted an opening to pursue a faux bribe of sorts to voters who hold student debt, but one that would disproportionately reward those without real need for help while saddling hardworking Americans with even more debt. 

However, if Biden thinks erasing some or all of the $1 trillion worth of student debt — that is, burdening all taxpayers with the debts incurred by those who pursued expensive degrees in low-demand fields — is a quick fix to turn around his approval numbers, he's likely in for another supposedly "bold" decision that leads to significant blowback for him and his party.

As Townhall explained in a fact check as loan forgiveness was being toyed with earlier this year:

The top fifth of households currently hold three dollars in student debt for every one dollar of debt held by the bottom fifth of households. The median income for households with student loans in 2021 was $76,400 and just seven percent of loan-holding households were below the poverty line.

As a result of elites holding more student debt — from their expensive and supposedly prestigious adventures in higher education — proposed student loan forgiveness is a massive dose of government welfare for the rich and successful who otherwise would have no issue repaying student loans.

So, Biden is about to use unilateral action to reward, predominantly, the same people Biden continually says must pay their "fair share" when he argues for tax increases. It's also the kind of move that isn't going to do anything to help inflation's rise to 40-year highs, but of course that means it's something the Biden administration and Democrat strategists think would be a brilliant move.