Undaunted by the Supreme Court, President Joe Biden is forging ahead with new plans to forgive student loan debt.
Earlier this month, the president announced he would cancel the student loans of 277,000 more borrowers. It was the latest in a stream of piecemeal initiatives Biden has put forth to take the place of the sweeping plan that the Supreme Court halted last year.
That plan, had it gone through, would have cancelled up to $20,000 in federal student loan debt for around 43 million borrowers. According to administration, the latest plans would eliminate or reduce debt for 30 million Americans, mostly through eliminating accrued interest.
It’s likely not a coincidence that, according to The New York Times, “Biden administration officials said they could begin handing out some of the debt relief — including the canceling of up to $20,000 in interest — as soon as this fall.”
Whether any particular forgiveness plan actually goes through, however, is ultimately of little consequence to the president. He’s counting on getting points for taking the shot, even if he doesn’t score. He can always blame those bad ol’ Republicans or that bad ol’ Supreme Court for thwarting his efforts to help Americans struggling to pay their bills.
The steady stream of announcements issuing from the Department of Education read like campaign press releases. One, released Jan. 19, said: “‘The Biden-Harris Administration has worked relentlessly to fix our country’s broken student loan system and address the needless hurdles and administrative inaccuracies that, in the past, kept borrowers from getting the student debt forgiveness they deserved,’ said U.S. Secretary of Education Miguel Cardona.”
Another press release, issued March 21, said that Biden would be emailing 380,000 people to notify them of the status of their loans.
It’s not unusual for incumbent presidents — or any officeholder, for that matter — to sidle up to the line of propriety when it comes to self-promotion using their position. Biden has done this with blatantly political signs touting student debt relief and various infrastructure projects. Former President Donald Trump put his name on pandemic stimulus checks.
But in his relentless pursuit of student debt cancellation, Biden is again being accused of conspicuous vote buying, as he was in 2022 when he introduced a debt-relief plan shortly before the midterm elections.
John Pelletier, director of the Center for Financial Literacy at Champlain College, wrote for The Hill then: “I voted for Biden, but I do think the move was cynically political, coming as it did 100 days before the November congressional elections. Forgiving loans of up to $20,000 to more than 40 million potential voters could be perceived as a crass attempt to buy votes.”
The president and his advisers don’t seem worried about that perception. As an answer to the perennial voter question “What have you done for me lately?” canceling student loans is a much grander gesture than buying potential voters “30 milkshakes and some chicken,” as Trump recently did during a visit to Chick-fil-A.
It’s also exceedingly more expensive. An analysis from the Penn Wharton Budget Model said Biden’s latest plans would cost $559 billion — a pittance compared to the $34 trillion national debt, but also an unnecessary expense, unlike say, defending our borders. (The same analysis also pointed out that 750,000 households with annual income that exceeds $312,000 would benefit.)
This spending, of course, is dependent upon the compelled largesse of taxpayers, many of whom didn’t go to college themselves, or worked for decades to pay off their own student loans and now would be asked to pay for the debt of others.
While it’s easy to cast conservatives who object to debt cancellation as heartless — some ask, what’s wrong with giving the kids a break, especially with the onerous housing costs they face? — their chief objection is that the plan is a government handout that does nothing to solve the core problem: the ever-escalating costs of a college diploma. The Associated Press has reported that tuition, housing and fees at some elite universities will exceed $90,000 a year this fall, a jaw-dropping sum that is enabled by the availability of “financial aid,” a duplicitous umbrella term which includes grants, campus jobs and loans.
The Education Department sums up the problem like this: “Since 1980, the total cost to receive a four-year postsecondary credential has nearly tripled, even after accounting for inflation. Pell Grants once covered nearly 80 percent of the cost of a four-year public college degree for students from low- and middle-income families, but now they only cover a third of those costs.” Forty-three million Americans currently have federal students loans that total $1.6 trillion, the Education Department says.
Canceling a portion of existing student debt solves none of the problems outlined above.
The White House’s celebratory announcements make it sound like the newest plans for debt relief are a done deal. They are not. The proposed rule was just published in the Federal Register this week, and public comment is allowed through May 17. Then the legal challenges will come.
According to Inside Higher Ed, “The administration is basing its authority to implement this plan on the Higher Education Act of 1965, which is different from the broad-based debt-relief plan struck down by the Supreme Court. The legal authority for the initial plan relied on a federal law the administration cited during the COVID-19 pandemic to change the terms of student loans to ensure borrowers weren’t negatively impacted by the national emergency.”
Some analysts believe the administration has a stronger case now than with its previous effort, since the Higher Education Act allows for the “compromise, waive, or release” of monies owed, according to Inside Higher Ed. “However, debt relief is an untested use of the law,” the article said. And, as CNN has reported, legal challenges are already underway for parts of the plan launched last year, making it possible that the debt relief tantalizingly dangled before borrowers throughout Biden’s term might come to nothing again.
It’s a risky strategy, but Biden is running short on options to court young Americans who feel shut out of the American dream and are unhappy with Biden’s foreign policy. As Trevor Hughes wrote for USA Today, they are “stewing with grievances.” It seems unlikely that a lowered balance on their student loan statements will be enough to drive them to polls in November. Especially when they realize that they will ultimately be paying those balances anyway — through the bill they pay each April 15.