Biden’s New Student Loan Workaround
Stretching a different law beyond belief, the president is still trying to ensnare more voters in a new entitlement.
It’s all essentially one big photo op. Kind Uncle Joe Biden smiles for the cameras, promises to help struggling college graduates pay off those student loans, and then with a scowl reassures that he’s not going to let mean, stingy Republicans take away that money.
Vote Democrat. That’s the only message that matters for this new entitlement.
Undeterred by the very Constitution Biden once said stood in the way of his unilaterally offering “forgiveness” for student loans, the president last August used a stroke of his pen to steal hundreds of billions of dollars from taxpayers and give it to college graduates.
Fast-forward to last month, and a 6-3 Supreme Court rightly agreed with Joe Biden and Nancy Pelosi circa 2021 — that he had no constitutional authority to do what he did. (That three justices supported him is disgraceful.) As Chief Justice John Roberts wrote for the majority, “Congress [must] speak clearly before a department secretary can unilaterally alter large sections of the American economy.”
Biden wasn’t deterred by that smackdown either. “I will stop at nothing to find other ways to deliver relief,” he promised.
On Friday, Biden found another way, again extending “forgiveness” by using a different law and accounting method to justify his power and money grab.
We won’t get fully into the weeds, but a few details are important. Instead of claiming the HEROES Act provided this mythical authority, as the administration argued before the Supreme Court, the new plan relies on the Higher Education Act of 1965. We know the ‘60s were the heady days of the “Great Society,” but it’s an enormous stretch of even the wildest imaginations involved in crafting those entitlements to say that law gave authority to the secretary of education — whose position didn’t exist until 15 years later — to abrogate contracts for student loans.
The administration claims Biden’s move will wipe out $39 billion in student loans for more than 800,000 borrowers. Yet even his defenders admit there’s no limiting principle to his justification, which means the reality will be far more money for far more people.
You know, just like every other entitlement.
Why? Because Biden’s move expands an Obama-era scheme to base repayment on income, as well as to slash in half the payment duration before the entire remaining balance is forgiven.
The result will be an incentive for borrowers to take out bigger loans to pay for the massive tuition increases that colleges and universities know they can keep imposing. College tuition has been drastically outpacing inflation ever since the federal government got involved in the loan racket.
In 2020, the Congressional Budget Office noted, “Between 1995 and 2017, the balance of outstanding federal student loan debt increased more than sevenfold, from $187 billion to $1.4 trillion (in 2017 dollars).” Today, borrowers hold $1.75 trillion in student loans, and roughly 92% of that debt is in federal loans.
Something tells us the value of a college education didn’t increase sevenfold since 1995. But colleges have to pay for all those diversity, equity, and inclusion administrators somehow.
In any case, the Democrats’ strategy was mapped out years ago. They knew it was safer to have Biden play Santa Claus than try to get such a massive new entitlement through Congress. They knew the Supreme Court would eventually strike it down as lawless. They knew Biden would do it again via another means, forcing Republicans once again to take legal action to stop it, ideally next summer before the presidential election. They knew which side student borrowers and their families would be cheering for.
“For far too long, borrowers fell through the cracks of a broken system,” opined Education Secretary Miguel Cardona. “By fixing past administrative failures, we are ensuring everyone gets the forgiveness they deserve.” Borrowers are victims, and Team Biden is heroically saving the day.
Who broke the system? Democrats. Who took out the loans? Students, not taxpayers. Who has constitutional authority for this? No one, really. Blatant redistribution of income like this is unconstitutional.
Never mind all that. This is a strategy aimed at convincing voters that Democrats want to help them and Republicans want to hurt them. It’s Political Handouts 101.
