As all who care are aware, President Joe Biden announced on August 24th that his Administration was canceling $10,000 in student loan debt for those earning less than $125,000 per year, and another $10,000 in such debt for those who had received Pell grants for low-income students.
In a post in May of 2021, I noted that one could sympathize both with those seeking relief from crippling higher education debt and with the millions of others who have either paid off or are paying off their loans and accordingly might resent any loan forgiveness measure then being urged by some Democrats. Because the mountain of outstanding student debt was what I termed in that note, “a millstone around the neck of our future economic growth,” I ventured at that time that forgiving much if not all of such debt seemed a means to spur long-term economic growth that would benefit both those whose loans were forgiven and those who paid off their loans. Although the high levels of inflation we are now experiencing didn’t occur to me – an oversight, given our last 40 years’ experience, that might be excused – I failed to take into account that such a debt-forgiveness measure would do nothing to curb rising college education costs or, more importantly, at least theoretically (since neither party’s officeholders seem to care any longer about our burgeoning national debt) add notably to the federal debt borne by all taxpayers, including those who perhaps for financial reasons didn’t go to college or managed to avoid incurring college loan debt.
What follows is the verbatim text of an email I received from a close friend – one sympathetic to the Biden Administration – the day after the decision was announced. He termed it a “Rant.” I received his permission to publish his email here. Having considered the issue from more angles than I did last year, I associate myself with his remarks 😉 .
“I think the student loan forgiveness policy is an awful decision. $600-800B deficit spending with no revenue offsets. Questionable legal authority tied to “emergency” powers in the Heroes Act (of all things!) that stretches the limits of presidential authority to a new breaking point. It can only be viewed as inflationary at a time when we had just been making some progress on turning the corner on an inflation crisis and the power of the issue was starting to wane for the midterm elections. It plays right into MAGA hands as it can be painted as elitist, making a direct “payment” to the college-educated at a time when the Democratic party is struggling to retain its historical blue-collar base. Those who pursued trades occupations should be rightly insulted. (See https://www.newsweek.com/mike-rowe-slams-student-debt-forgiveness-1555317.) It’s anathema to American Families taking accountability for their decisions and “educating” their children about the costs and payoffs of attending various colleges or other post-secondary learning or experiences. Provides more red meat for the Republicans to take away Democratic momentum driven by the Roe decision. A clear instance of caving to or at least mollifying far left progressives (who will not be pleased as it didn’t go far enough).
The mid-term election fortunes were shifting. The Roe issue was “winning” over inflation. Few if any candidates were asking for direct participation from Biden/the White House. I can only conclude that this is an issue where Biden let his legacy and ego get the better of him.”
Although some pundits are opining that the Administration action will help Democrats in this fall’s elections, I share our friend’s concern that Mr. Biden may have committed an unforced political blunder that will hurt his party’s prospects. I know that we both hope that our fears prove unfounded.