The Partisan Cynicism and Moral Sanctimony of Biden’s Student Debt Relief

The policy is regressive, not progressive. But it appeals to a bloc of voters that Democrats view as indispensable.

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President Biden’s plan to cancel billions in federal student loan debt is like a piñata: You can attack it from any angle and find some reward. In short, people making less than $125,000 will get $10,000 of their debt forgiven, no strings attached. Recipients of needs-based Pell grants will see up to $20,000 erased.

It might be a stretch to say this order is literally lawless, but it’s close. The White House claims the 2003 Higher Education Relief Opportunities for Students Act gives Biden unchecked authority to cancel student debt (a power even Speaker Nancy Pelosi has said he doesn’t have). The HEROES Act, passed in the wake of 9/11, was meant to help military personnel and others with student debt relief in wartime or national emergencies. Congress surely didn’t intend to give the president unilateral power to erase all civilian student loans as he sees fit.

A president who relentlessly boasts that, thanks to his withdrawal from Afghanistan, America is “not at war” is invoking wartime powers for his personal—and partisan—domestic policy priorities. Many who fretted over authoritarianism’s dark shadow when Donald Trump stretched his powers for political expediency are remarkably untroubled by this imperial diktat.

Canceling student debt, long an obsession of progressives, is seriously regressive. According to the nonpartisan Penn Wharton Budget Model, more than 6 in 10 beneficiaries of the $10,000 blanket forgiveness are in the top 60 percent of the income distribution.

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  1. Katie

    "[M]ore than 6 in 10 beneficiaries of the $10,000 blanket forgiveness are in the top 60 percent of the income distribution." Why is this a reason to call the debt cancellation "regressive"? I don't support Biden's action, but I fail to see how 60 percent of the beneficiaries being in the top 60 percent of the income distribution is an indictment. I mean, 40 percent of the beneficiaries must be in the bottom 40 percent of the income distribution, right? The Penn analysis you cited also states that "about 75% of the benefit accruing to households making $88,000 or less." I don't get it .............

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  2. Blantons

    Simpler plan: $1 per vote, and you are free to buy as many as you wish. Put up or shut up, as they say. Chicomms and Putin can buy as many as they want as well - no limits, open to all comers. Funds received remand to treasury…think about all the likely scenarios - which likely trajectories are worse than our current one?

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  3. Jaybrown

    What about the government lending the money to colleges and universities and letting them decide what students to lend money to and how much? If they are on the hook to the feds, they might worry a bit about the difference between a good loan and a bad loan, and about pricing themselves out of the range of the money they have to lend.

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  4. TZ

    There are many reasons to dislike this blatant vote purchase by the Biden administration. What's worse is that they continue to focus on the symptoms and not the disease of government interference. The disease has created a sky-high cost of education and the price continues to rise.

    Higher Education is great (college is not the only option for higher education - skill training should be the focus for more people than college education). Health Care Insurance is great. Home Ownership is great. I think most Republicans will agree with those three things. The difference is whether the federal government should be subsidizing each of these things and to what degree. Clearly the subsidies have increased demand which has swamped the supply and caused inflation in all three of these critical areas.

    I used to think that Republicans were for less spending and that Democrats were for more spending. These days it is hard to see the difference in spending between the Ds and Rs other than different priorities. Both sides spend money they don't have with no care for the consequences of the debt. With the Fed trying to fight inflation, these higher interest rates are going to make debt service on the $30+ trillion national debt a real problem.

    When President Clinton left office the national debt was $5.6 trillion. After 8 years of President GW Bush the debt was $10.5 trillion. After 8 years of President Obama the debt was $19.8 trillion. When President Trump left (after only 4 years) the debt was $26.7 trillion. And now after half a term of President Biden the debt is almost $31 trillion.

    This path is unsustainable. Unless the plan is to create so much inflation that it devalues the actual debt. Debt can be a very important tool, but what if the output of the borrowed money doesn't create value and future wealth? I am looking squarely at the people who incur huge amounts of debt for a college degree that doesn't come close to repaying the investment.

    It's basic economics.

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  5. Jaybrown

    " What part of "the president does not have that authority" do people not get? The courts are going to make mincemeat of this. If the next Republican Congress doesn't kill it first.

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  6. Halvor

    The taxes of sanitation workers and grocery cashiers aren’t enough to cover the services and benefits they receive from government, so you need not fear that dead-beat college students are taking cash out of their wallets. The transfer is coming from the top quintile of taxpayers.

    It’s as if Jonah is in effect still arguing that Obama lied about 5% of health insurance policyholders who might actually have liked their crappy policies and wouldn’t have lost them anyway due to recision or churn.

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  7. Duane Truitt

    Presumably this policy will be challenged in the Federal courts, and if indeed the authority Biden relied upon is as unrelated as Jonah suggests, then it seems quite likely that the current conservative SCOTUS will overturn it as lacking Congressional authorization.

    What is even more obvious is that this policy was announced for purely Democratic partisan purposes as a means to buy votes. The political credit and resulting votes will be realized in just two months, while the court action that's likely to overturn it will probably take 1-2 years to process to a final SCOTUS ruling. And upon its overturning, then Biden and the Democrats still earn brownie points in 2024 for trying.

    At least that appears to be the partisan calculation.

    But the political benefit, besides being only short term, is not likely to be great until debt cancellations start going out - and if challenged in court and the lower courts issue a stay, those cancellations won't be issued for years to come, and probably never. So maybe the partisan rewards may not be so great.

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  8. Avatar photo
    Wayner

    Rage boosts turnout more than gratitude. This move by Biden hurts Democrats. Progressives suck at politics.

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    Rajeev

    While I agree with the overall sentiment that debt relief is legally flimsy and probably the worst way to stimulate an economy or benefit people during times of high inflation, I think it's important to not conflate two different things. Just because Joe Biden claims we are "not at war" doesn't mean that he is hypocritical on the issue. He is using the HEROES act "national emergencies" as the justification not the financial harms of war.

    Again, I personally think any debt forgiveness should be tied to national, state, local service or administered in extremely narrow ways to do so for students harmed by for example institutions that closed or deeply mislead their students. But, in general, calling the pandemic as a national emergency is completely reasonable. In fact it probably was the most disruptive event in the life of anyone under the age of 50. Also, I could be wrong but wasn't part of Donald Trump's order that originally paused the payments of loans related to the HEROES act?

    I doubt this current action given its size would pass legal scrutiny but I am no legal expert. I personally think it is really hard to show standing in the first place to challenge this law as there are so many targeted government expenditures that help groups of people at other's expense. I don't know why Republicans allowed the pausing of payments under the same legal justification given that I'm sure there were other ways to legally justify it during the pandemic.

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  10. Jim S

    Yawn. I mean seriously. I’ve spent 30 years watching the GOP create targeted policy designed to benefit their social conservative and financial sector base without the tiniest concern about the financial and social damage caused by the policies.
    Sorry as a Dem I will take college educated socially aware liberals over the Trumpvangelicals any day of the week.
    Not trolling…just expressing my opinion. Every political party caters to It’s base. It’s not like this is an outlier.

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    1. Mathew A

      So you only oppose bad policy on the other side. Well at least you are honest

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      1. Jim S

        Fair criticism but to be clear I never said this was GOOD policy, just that I think the reaction to it is way overblown. To me it is a nothing burger and a distraction.

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