In Brief: The Great Pandemic Student-Loan Scam
Emergency debt relief is turning into permanent forbearance.
As part of the federal government’s pandemic relief, it did many things that had less to do with the pandemic than with enacting long-held dreams of leftists everywhere. Direct payments to Americans? Check. Enhanced unemployment that seeded a more widespread $15 minimum wage? Check. Forgiving student loans? In the works, and the Wall Street Journal’s editorial board says it “may be the biggest scam of the pandemic.”
The Administration’s student-loan payment pause is scheduled to expire on May 1. But [last] week Washington Sen. Patty Murray urged an extension to 2023 while “forgiving some debt for all borrowers,” especially minorities and lower income earners. “Debt relief shouldn’t require making it through a gauntlet of paperwork,” she declared.
Here we go again. The March 2020 Cares Act provided a temporary pause on loan payments and interest accrual through September 2020. Presidents Trump and Biden used emergency executive power to extend the forbearance, which has cost taxpayers about $5 billion a month. Borrowers have saved on average $400 a month. Most haven’t needed the relief.
The unemployment rate among college grads has fallen to 2.2%. Many of the 40 some million borrowers who have been liberated from making monthly payments have played the stock market, paid down higher-interest debt or made down payments on homes. Yet Democrats want to make the relief permanent.
Democrats already nationalized student loans in 2010. Ever since then, the goal of the increasingly powerful leftist flank of the party has been to ditch loans altogether, creating another entitlement of “free college.”
They want President Biden, like a priest in the confessional, to simply declare student debts forgiven. “Canceling $50,000 of student-loan debt would help tens of millions of Americans, people whose only sin was to be born into a family that couldn’t write a check for them to go to school,” Sen. Elizabeth Warren said this week. Actually, forgiveness would mostly benefit higher earners.
Midterms are coming up, and Joe Biden is seeing record disapproval ratings that jeopardize Democrats in Congress. That means while they still control the levers of power, they’re going to be pushing for all manner of giveaways to buy votes. In this case, as the Journal concludes, “Get ready for a massive election-year gift to student borrowers at the expense of taxpayers.”
