In his latest desperate attempt to buy votes, Joe Biden is trying to piece together a student loan bailout bit by bit after his initial debt forgiveness program was struck down by the Supreme Court of the United States in a 6-3 decision.
According to CNBC:
President Joe Biden announced that he approved $9 billion in student loan forgiveness for 125,000 Americans.
The relief is a result of his administration’s fixes to a number of programs, including the income-driven repayment plans and Public Service Loan Forgiveness.
More than $5 billion of the aid will go to 53,000 borrowers who’ve worked in public service for a decade or more; $2.8 billion of the forgiveness is for 51,000 borrowers enrolled in income-driven repayment plans; and another $1.2 billion of the cancellation will go to 22,000 borrowers with disabilities.
Through this and other efforts that haven’t been blocked, the Biden administration has now canceled $127 billion in student debt for 3.6 million Americans. The American Enterprise Institute places the true cost of that forgiveness to taxpayers at $316 billion, citing the cost of foregone revenue (interest payments) that results from this policy.
The Biden administration had initially planned on canceling $400 billion in student debt - though one estimate from the Wharton School estimated the price tag would’ve blown past $1 trillion. Since bailout out debt does nothing to address the root cause of student debt (skyrocketing college tuition), it wouldn't be long until student debt was exactly where it was before a bailout. For example, if the government were to wipe out $700 billion worth of student debt (the middle of the two estimates), that would only bring national student debt levels back to where they were in 2012.
The entire point of going to college for nearly everyone is to boost their earning potential, and thus demanding student debt forgiveness means demanding those who don’t have a degree subsidize those with greater earning potential than them through their taxes. An analysis from the Foundation for Economic Education found that full debt forgiveness would benefit the top 20% of income earners six times more than the bottom 20%, as those raised in higher earning households are more likely to go to college in the first place, and earn more because they went to college.
Matt Palumbo is the author of Fact-Checking the Fact-Checkers: How the Left Hijacked and Weaponized the Fact-Checking Industry and The Man Behind the Curtain: Inside the Secret Network of George Soros
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