Barack Obama set the stage in 2015 for the student loan forgiveness fiasco when he announced the ‘America’s College Promise’ proposal to make two years of community college free. On the proposal’s web page is this: “Students should be able to get the knowledge and the skills they need without taking on decades worth of student debt.” (emphasis mine)
Obama’s idea has now been extended to include four-year colleges. His lackey, that joke who currently occupies the Bully Pulpit, is simply forwarding his boss’ idea. The problem for Biden is that Obama’s idea is neither legal nor morally acceptable.
An article in The Conversation makes a good moral case for not canceling student loans: “Canceling debt also seems to violate the moral principle of following through on one’s promises. Borrowers have a moral duty to fulfill their loan agreements, the philosopher Immanuel Kant argued, because reneging on promises is disrespectful to oneself and others. Once people have promised to do something, he noted, others rely upon that promise and expect them to follow through. In the case of federal student loans, a borrower signs a promissory note agreeing to pay back the government and, ultimately, the taxpayers. And so student borrowers seem to have a moral duty to pay their debts unless mitigating circumstances like injury or illness arise.”
Robert Farrington provides five excellent reasons why student loans should not be forgiven.
1. Loan Forgiveness Rewards People Who Overpaid for Their Degrees
It punishes people who made wise choices about college majors (STEM majors) and use what they learned to earn lots of money. ‘Studies’ majors who borrowed the same amounts don’t make lots of money. Forgiveness means they overpaid to obtain useless degrees.
2. Forgiveness Asks Taxpayers to Pay for Individual Decisions
As financial attorney Leslie Tayne says, “…it boils down to the fact that you’re asking taxpayers to cover individual decisions regardless of how good or bad they are.”
3. Student Loan Debt Holders Are Already Privileged
Says Tayne, “Those who are pursuing higher education are already generally better off financially. Therefore, forgiving student loan debt could be considered helping a privileged group rather than spending government funding to help those in poverty.”
4. Nobody Has Skin in The Game
Isn’t it ironic that Farrington uses a phrase made popular by Obama, the cause of this entire situation? With loan forgiveness and free college, nobody is held responsible for the growing costs of higher education. Colleges have no incentive to compete or economize.
5. Loan Forgiveness Doesn’t Address Rising Costs
Financial Analyst Riley Adams says loan forgiveness solely as a means for resolving the growing student loan debt crisis will lead to unintended consequences with perverse incentives for students and society.
Farrington closes by saying, “While we do need bold action to help those who are struggling with student loan debt, total student loan forgiveness is not the solution and will only create a moral hazard problem for current borrowers and future students.”
over eighty forgiveness plans available.
As for legality, the best that government lawyers could come up with was the word ‘waive’ in the 2003 HEROES Act, a law passed after 9/11 that allowed relief from student loan payments during times of war or national emergency. No less than Nancy Pelosi said the act couldn’t be used to forgive student loans.
Biden tried to use the Higher Education Act, tried to use section 432(a) as justification for student loan forgiveness. Again Pelosi said the act could not be used for that purpose. She insisted any loan forgiveness program has to first be initiated by an act of Congress.
But the most dangerous action Biden can take (in my opinion) is one that permits a president to do anything he wants to do by circumventing the Constitution. If he somehow gets away with it (probably on a legal technicality), he will open Pandora’s Box. All subsequent presidents, regardless of party, will use his methods to get around the Constitution, will see what they can do that nobody can complain about in the courts. If successful, Biden will abolish the concept of separation of powers. He’ll be an unlimited king.
Only Congress can appropriate money. There’s no authority for the president to spend however much he wants. Biden, through the student loan forgiveness program, wants the Secretary of Education to waive student debt and assume responsibility for paying off loans with money Congress hasn’t appropriated. That is one basis for SCOTUS ruling against him.
The state of Nebraska (and six others states) have challenged the student loan forgiveness program, claiming in part that the programs overreach and violate the separation of powers. A second lawsuit brought by two students argued that the Secretary of Education doesn’t have the authority to establish the plan and asked the federal court to set it aside. Biden’s administration argues that none of the plaintiffs have suffered actual injuries, aren’t the proper parties to sue, and have no standing. But the Supreme Court so far disagrees. Their ultimate response will rest upon how it interprets the principles regarding how the Constitution divides power among the three branches of government to ensure none of them has too much authority. For Joe Biden, the extent of the executive branch’s power is also being interpreted.
A White House spokesperson said, “While we strongly disagree with the court, we prepared for this scenario. The president will make clear he’s not done fighting yet, and will announce new actions to protect student loan borrowers.”
About being stopped, Biden said, “The hypocrisy of Republican elected officials is stunning.”
Chuck Schumer (D-NY) reacted, “This disappointing and cruel ruling shows the callousness of the MAGA Republican-controlled Supreme Court. The hypocrisy is clear: as justices accept lavish, six-figure gifts, they don’t dare to help Americans saddled with student loan debt, instead siding with the powerful, big-monied interests.”
Interestingly, like rats abandoning a sinking ship, Protect Democracy, a group with Democrat and Republican leaders cofounded by Barack Obama, filed an amicus curiae brief to the Supreme Court concerning Biden’s plan. The brief states, “It is important to recognize that both student debt and the pandemic have disproportionately harmed lower income and minority communities. But the answer to these problems is not the unchecked aggrandizement of executive power.”
Warren Beatty has created a web page that facilitates quick responses to anything you consider outrageous: quick-rant.atwebpages.com
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