The Free Press
Depending on your politics, last week President Joe Biden transformed the lives of millions of young Americans saddled with college debt—giving them a chance to pay down their student loans, buy homes, and, one day, send their own kids to college. Or, last week President Biden saddled a new group—this one not so upwardly mobile—with a much higher tax bill for choices they didn’t make and can’t afford, while plunging our economy even deeper into inflation.
Who is right?
To debate this important subject, we invited two politicians we admire for their willingness to speak candidly and thoughtfully about some of the thorniest issues confronting the nation: Ro Khanna, a Democratic congressman from northern California, whose district encompasses Silicon Valley; and Tim Scott, a Republican senator from South Carolina.
Below, Sen. Tim Scott makes the case against Biden’s plan. To read Ro Khanna’s piece defending it, click here.
—BW
It’s an appalling thing to ask the average American worker, who is struggling to afford groceries and gas, to subsidize the college debt for a household making six figures. It’s even more astonishing to ask a worker to do so during the worst inflation in half a century.
Yet that is exactly what President Biden just did.
The White House claims that its plan, announced last week, “cancels” $500 billion in student loan debt and relieves 40 million borrowers. But “loan cancellation” is an Orwellian phrase. You can’t cancel debt—someone always has to pay.
And I know exactly who will: Workers just like my mom.
I grew up in a single-parent household in South Carolina with a mom who worked double shifts as a nurse’s aide. My mom is one of millions in this country who wasn’t able to go to college. Even if she’d been able to qualify for loans, taking on that kind of debt would have crippled our family. Instead, she worked hard to provide for my brother and me—to put food on the table and keep the lights on.
President Biden may claim to care about hard-working Americans like my mother, yet he’s shifting half a trillion dollars of student loan debt onto everyday taxpayers. It’s inflationary, it’s illegal, and it helps those who need it least: higher-income college graduates.
Let’s take each of those in turn.
Start with what this executive action will do to our already ailing economy. In announcing the plan, President Biden said “the whole economy” will be “better off.” But nothing could be further from the truth. Anyone who has taken Econ 101 can tell you that nothing is free. Biden’s plan is estimated to cost American taxpayers at least $2,000 each.
The plan is also illegal. President Biden’s Department of Education relies on a heavily disputed interpretation of legislation passed in the aftermath of the 9/11 terrorist attacks, which gives the president some additional powers during a national emergency. The idea that this peacetime president is exploiting a loophole in wartime legislation is unprecedented, offensive and a clear abuse of power. In fact, when the president flirted with the idea of a student debt “cancellation” earlier this year, even Speaker of the House Nancy Pelosi said it wasn’t in the scope of his authority. “People think that the President of the United States has the power for debt forgiveness. He does not,” she said. “That has to be an act of Congress.”
Doubting that he would be undeterred by the legal limits, I recently introduced the Student Loan Accountability Act, which further clarified that the Secretary of Education does not have the legal authority to implement mass loan cancellation.
Nonetheless, the president moved forward. Suddenly, Speaker Pelosi is rather quiet on whether she still believes this move is illegal. It’s not surprising that politicians on both sides of the aisle have come out against this move. Former President Obama’s top lawyer at the Department of Education announced his skepticism earlier this year. And even President Biden himself called the president’s authority to forgive debt “pretty questionable” before taking office.
Then there is the question of who this plan will actually help. White House talking points push the lie that this plan will help the middle class and low-income families. That’s nonsense. By their own admission, this plan bails out those making $125,000 or a married couple earning $250,000—people who could hardly be classified as middle class, much less low-income.
The reality is that college graduates make an average of $78,000 a year, while those with a high school education earn around $38,000. President Biden’s plan essentially tells those Americans making $30,000 a year and working paycheck to paycheck that—in the midst of record-high inflation—they must fork over even more money to lighten the load for those making higher salaries.
It is fundamentally unfair and wrong to ask those who didn’t agree to loans and are making less to pick up the tab for those who did agree to loans and are making more. Furthermore, this move has the potential to be catastrophic for the U.S. lending system. The executive branch is sending a message to both banks and borrowers that their legal agreements can be overridden at the stroke of a pen. Introducing this type of uncertainty will not only lead to more loans, but will give universities power to raise tuition prices even higher.
Don’t just take my word for it. Listen to what Paul Begala, President Clinton’s top advisor, said this past weekend on CNN: “What is my party doing with this? I think they’re not helping the people that we’re here to help, which is poor people and underprivileged communities.”
So why is President Biden doing this? With polls showing President Biden and the Democrats’ approval ratings at abysmal lows heading into the midterms, it’s clear they’re betting on this gimmick to inspire their own progressive supporters, since regular folks are fed up with the trajectory of the country.
If they really wanted to help working Americans, they would look to promote American energy production. Or they would look for solutions to actually reduce the cost of higher education, which this plan fails to address. Why not look to the benefits of expanding Opportunity Zones, which would create affordable housing and well-paying jobs in some of our poorest communities? Any one of these policies would have a direct impact on the people who need help the most.
Instead, nurse’s aides like my mom, flight attendants, UPS drivers, construction workers, taxi drivers, firefighters, and millions of other Americans who don’t have a four-year college degree will be further burdened at a time when they desperately need relief.
Not only is this a cynical, chauvinistic handout to the president’s voters in a midterm year, it’s likely to backfire. How will Democrats explain to their constituents why they must pay for an education that they didn’t receive?
They can’t. Which is why they refuse to say who will pay for this plan.
Yet the facts are clear: this does not address the real problems of college affordability. It does nothing to energize this stagnant economy and failing job market. And it only worsens inflation and makes life harder for ordinary Americans.
This is really sad and appalling. Buy a vote Biden. Ugh. Especially since this loan payoff also applies to students from wealthy families and those who now earn a high income. This policy has nothing to do with what is deserved.
Two of my recently graduated nephews voted for Biden in part because of his promise to pay off their student loans despite the fact the majority of their college tuition and other costs were already reduced to a minimum because of low income and personal life situations.
In contrast, I know many working class young people who lacked the financial resources or had other responsiblities that precluded them from the luxury of not working while in school.
I took out student loans and worked partd-tme through out the seven years it took me to get my Bachelor's degree. I don't want to ride a high horse too far because yes, costs were far more reasonable back then, and I understand the debt burden is much higher as costs have gone haywire in the decades since I attended college. However, as Senator Scott noted, this approach does nothing to scrutinize or control the runaway costs of college. I find it puzzling to look at the relatively low increase in teaching salaries versus the huge increase in both the number of and salaries of bureaucratic administrators. Even public unversities now award huge compensation packages to top administrators as if they are pay for themselves with fund raisisng activities. It also seems far more is spent in assuring luxurious surroundings for students. Even course bulletins have become ludicrously glossy and expendsive.
Foreign students are given preference to a number of limited slots because they pay higher tuition (for all 4 years? or not). but their higher tuition really only reflect operating cost, not the capital costs needed to increase capacity. And in reality public universities are still heavily subsidized by generarl taxpayer. And when limited slots are granted to foreign students, middle and lower class students must often go out of state and pay even higher out of state tuition costs to get a spot at a lesser college. So we have a subsidy to wealthy foreign students, and it turns out we've also greatly subsidized the economies of India and China as the brain drain back to these countries comes at the expense of US students and our economy. (Yes we've had some amazing and talented immigrants who start out as foreign students, but why do we have to subsidize wealthy students?)
These trends are even more irritating since there is no evidence that the quality of education has improved one iota. All I've noticed is the rise and push for an increasingly poisonous, intolerant far left ideology followed graduates emerging with a sense of elitist entitlement. And of course Biden is rewarding that...gee..because they are so "special"?.
I could support a partial student loan forgiveness program if lower or middle income graduates worked several years in a useful capacity to give back to their community. But I don't see this as part of the package.
The other loss here is that it is actually important for students pay for at least some of their own education. With at least some skin in the game they are more likely to apply themselves and value their education. As someone who worked & paid for the majority of my own college expenses, a student is far more likely to make sure they get value for the money spent on their education and to be serious about their studies. Encouraging responsiblity should be an education goal, yes?
Meanwhile I think about the folks who work daily just above minimum wage having to pay more of their income so Biden can get votes. All I feel is complete disgust with this administration.
This article is why I love Common Sense so much. As a liberal, I read Ro Khanna's piece first, then Tim Scott's. Although both pieces had merit, I tend to agree more with Tim Scott - who'd a thunk it? :-)
Keep up good work BW!