When Americans make lists of the persecuted, downtrodden groups in our society, college graduates rarely top the ranking. But President Joe Biden is offering one bribe after another to convert college graduates into perpetual dependents of the Democratic Party. Biden’s handouts helped prevent a “red wave” of Republican victories on Election Day and he appears hellbent on forcing taxpayers to pay any price to continue buying votes for his party.
Federal subsidies for higher education have been one of the least recognized boondoggles of recent decades. Federal-backed loans for higher education took off in the 1960s and have skyrocketed in this century. Almost $2 trillion in federal student loans are owed by 46 million people.
Federal aid spurred tuition increases that make it far more difficult for unsubsidized students to afford higher education. A student’s financial “need” is defined largely by tuition fees. Every tuition increase means an increase in federal aid for students—and thus an increase in the federal aid for the college. A 2012 study by the Center for College Affordability and Productivity concluded that financial aid “inevitably puts upward pressure on tuition. Higher tuition reduces college affordability, leading to calls for more financial aid, setting the vicious cycle in motion all over again.” A 2015 Federal Reserve analysis “found that for every new dollar made available in federally subsidized student loans, schools…rose their rates by 65 cents.”
Federal policies have helped turn young people into a debtor class perpetually clamoring for relief from its burdens. Rather than seeing the federal government as a potential peril to their rights and liberties, some debt-burdened young adults view it as the “Great Liberator”—presuming the right candidate is elected.
Rather than ending the perverse incentives embedded in federal aid, Biden “solved” the problem by canceling borrowers’ obligation to repay their subsidized loans. On August 24, Biden invoked an obscure provision of the post-9/11 Heroes Act to justify hundreds of billions of dollars of handouts to people who had taken out federal college loans. The Heroes Act permits the Education Department “to waive or modify student loan payments in times of national emergency.” Individuals earning less than $125,000 could have up to $20,000 in federal debt automatically erased; couples earning $250,000 could see a $40,000 forgiveness windfall.
Biden had previously admitted that the law would not justify blanket forgiveness of college loans, but he and his advisors decided to force Americans to pay any price for Democrat votes in the midterm congressional elections. The Department of Education justified Biden’s decree as “a program of categorical debt cancellation directed at addressing the financial harms caused by the COVID-19 pandemic,” including “cancellation for borrowers who have been financially harmed because of the COVID- 19 pandemic.” But college graduates were doing much better financially than other Americans who get stuck with the bill for their schooling. Their unemployment rate was less than two percent at that time.
Former Education Department lawyer Hans Bader estimates that the total cost of Biden’s student loan write-offs could exceed a trillion dollars. A Wall Street Journal editorial headlined “Biden’s Half-Trillion-Dollar Student-Loan Forgiveness Coup” derided his decision as “easily the worst domestic decision of his Presidency.” The Journal pointed out that Biden based the loan cancellation for more than 40 million borrowers “on no authority but his own” power as president. “This is a college graduate bailout paid for by plumbers and FedEx drivers,” the Journal noted. As former OMB director David Stockman observed, “Student debt is overwhelmingly an investment in professional credentialization that should never have been an obligation of the taxpayers in the first place.” ZeroHedge quipped on Twitter: “Have colleges raised tuition by $10,000 yet or are they waiting a few days first?”
There was no rationale for blanket cancellation of student debts that would not justify blanket cancellation of almost any debt citizens owed to the government. At the same time that Biden played Santa Claus with student loan forgiveness, his administration was hiring 87,000 new IRS agents and employees to squeeze more money out of working Americans.
The handouts helped buy Democrats their biggest boost among voters—a 28% advantage over Republicans in voters age 18 to 29 in the mid-term elections. Two days after the election, Biden tweeted, “I want to thank the young people of this nation” who voted for “student debt relief.” Jon Cooper, a former top Biden campaign operative, tweeted, “Young people: You saved our butts. THANK YOU.”
Two days after the election, federal judge Mark Pittman struck down the bailout as an unconstitutional decree: “In this country, we are not ruled by an all-powerful executive with a pen and a phone. Instead, we are ruled by a Constitution that provides for three distinct and independent branches of government.” Pittman rejected the “emergency” basis of the order in part because Biden had proclaimed in September on “60 Minutes” that “the pandemic is over.” The following week, a federal appeals court in St. Louis unanimously voted to impose a nationwide “injunction considering the irreversible impact the Secretary’s debt forgiveness action would have” on “Americans who pay taxes to finance the government.”
Some activists believe Biden intentionally swindled young voters with a bait-and-switch scheme. Briahna Joy Gray, who was the press secretary for Bernie Sanders’ 2020 presidential campaign, asked, “Did Biden RIG student debt forgiveness to fail, just to help him in midterms?” She explained on Twitter: “They used the promise of student debt cancellation to induce young voter turn out—knowing it wasn’t going anywhere [because] they relied on faulty legal authority. Hard to convince me the Biden admin didn’t do this intentionally.” A student activist group called the Debt Collective is circulating a petition: “I refuse to pay a debt the President promised to cancel.”
Biden came up with a Solomonic solution—sawing taxpayers in half—to placate his enraged supporters. He announced on Twitter, “Republican special interests and elected officials sued to deny this relief even for their own constituents. It isn’t fair to ask tens of millions of borrowers eligible for relief to resume their student debt payments while the courts consider the lawsuit.” On November 22, Biden announced that he was extending the moratorium on repaying student debt until August 2023. That moratorium began in March 2020 during the first COVID lockdowns and has already cost taxpayers $155 billion, according to the Committee for a Responsible Federal Budget. When Biden announced his loan forgiveness decree in August, he promised, “The student-loan payment pause is gonna end. It is time for the payments to resume.” Biden betrayed that promise, apparently believing that no one should any be obliged to fulfill their legal obligation as long as there was a snowball’s chance in hell that some judge would uphold his scheme. Extending the loan payment moratorium could give a crucial boost to Democratic Sen. Raphael Warnock, locked in a tight December 6 run-off election.
What happens when the latest moratorium extension ends in August 2023? Biden may be formally kicking off his re-election campaign at that time. And what better way to buy support than by extending a handout to one of his most important constituencies? In the 2022 mid-term elections, “52 percent of voters with college degrees supported Democrats while 42 percent of voters without degrees did so,” The Washington Post reported.
Protecting former students from the federal debts they voluntarily accepted has become one of the great human rights issues of our times. Michael Pierce, chief of the Student Borrower Protection Center, is calling for Biden to “make it clear that the student loan system will remain shut off as long as these partisan legal challenges persist. Borrowers’ fate is in Biden’s hands.”
And this is the ultimate problem for democracy. Student loan bailouts have extended Biden’s power over a huge swath of American voters. Each new federal benefit program extends political control over both the recipients and anyone forced to finance the handouts. Speaking to an AFL-CIO convention earlier this year, Biden shouted, “I don’t want to hear anymore of these lies about reckless spending. We’re changing people’s lives!” “Changing” means controlling—but only for their own good, or at least for the re-election of their benefactors
French philosopher Bertrand de Jouvenal warned, “Redistribution is in effect far less a redistribution of free income from the richer to the poorer, than a redistribution of power form the individual to the state.” If Biden’s loan repayment moratorium is extended through 2024, “a typical medical student who graduated in 2019 would effectively have $107,000 forgiven and a law school graduate would have $65,000 forgiven…New doctors receive almost ten times the benefit of the average borrower and $107,000 more than someone who never attended college,” the Committee for a Responsible Federal Budget reported. Even The Washington Post editorial page slammed Biden’s student debt forgiveness decree as a “regressive, expensive mistake.”
But the inequity is irrelevant if the handouts enable Biden and his Democratic colleagues to perpetuate their grip on power. As legal fights over loan bailouts continue, Americans will continue to be assailed by claptrap about ex-students as a holy class of martyrs—or at least oppressed victims. But most of the self-proclaimed “best and brightest” are not smart enough to recognize how they have been converted into tools for Leviathan.
Courtesy of the Libertarian Institute.