Blaine’s Bulletin: Biden’s Student Loan Debt “Cancellation”

Affordability should never stand in the way of American students’ ability to receive the highest education possible. There’s a reason our country is called the “Land of Opportunity.” Especially in today's highly competitive and global economy, it’s essential we create new opportunities for students. As the father of three children and grandfather of seven, I know first-hand the important role education plays today. Unfortunately, for many Americans, the dream of a college education is out of reach as the price of college continues to skyrocket. Most of us agree that the cost of a college education in many cases is far too high. But I do not agree that forcing taxpayers to pay for billions of dollars in student loan debt will help alleviate the high cost of tuition, especially with our current economic state. 

By now you have heard quite a bit about President Biden’s plans to “cancel” student loan debt. In order to do that, the Administration will need to spend up to $1 trillion of taxpayer money. According to estimates from the National Taxpayers Union, the President’s plan will cost each taxpayer an average of $2,500. It’s important to remember that these loans aren’t just going to be “forgiven” as the Administration is claiming. The debt will instead be transferred to American taxpayers – most of whom do not benefit from the bailout. 

That brings us to the next problem: every person in America doesn’t have student loan debt. Why should a Missourian who worked their way through college, or a family who spent their child’s entire life saving be forced to pay off someone else’s debt? Why should a person who chose not to attend college themselves be forced to pay for someone else’s choices? It’s simply not right to ask someone who went straight into the workforce or took advantage of one of our state’s high quality apprenticeship programs to pay off loans for someone else to get their PhD.  

While the Administration’s action may provide short-term relief for some – assuming it holds up to legal scrutiny – it will actually make college affordability even worse in the long run. Numerous studies have found that increases in federal aid directly leads to colleges and universities raising tuition costs. The schools view more government money as an opportunity to raise their own prices and increase their revenue. If President Biden creates a belief that the government will simply pay students debts, universities will continue to raise tuition and, even more concerning, students will take on even more debt that they cannot afford.   

It's extremely important to note that the President does not have the legal authority to simply forgive debt owed to the government without authorization from Congress. In fact, even Nancy Pelosi acknowledged this at a press conference last July when she said, “people think that the President of the United States has the power for debt forgiveness. He does not. He can postpone. He can delay. But he does not have that power. That has to be an act of Congress.” Forgiving federal loans is considered an appropriation of funds which the Constitution clearly states only Congress can do. This same path was explored during the Obama Administration. The General Counsel for the Department of Education at the time confirmed these concerns and stated that the Executive Branch likely does not have the authority to cancel mass student debt. 

Instead of billions of dollars of loan forgiveness that will largely go to wealthy families, Congress and the Administration must work together to ensure federal dollars are supporting educational opportunities that will help students’ professional prospects and ability to not only repay their loans, but provide for themselves and their families in the future. To quote an article published by the Cato Institute in July of 2021, classes “from History and Analysis of Rock Music to Ultimate Frisbee” are being offered to students at a steep price.  It is no wonder so many students leaving college aren’t prepared for the workforce. We cannot continue to let taxpayer dollars subsidize classes that in no way benefit students and only bolster the school’s bottom line.

Unfortunately, the timing of this announcement is anything but coincidental. The legality of the Biden Administration’s announcement is dubious, meaning this decision will be headed to court and likely be overturned. But that will probably not be possible until after November – or after the election. This was not an attempt to make life easier for Americans with student loan debt or to address the cost of college. It’s a short-term ploy to earn votes with no regard for the borrowers or taxpayers who will be left holding the bag on the other end.