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Star Parker

Founder & President, Center for Urban Renewal and Education

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Opinion

Biden student debt relief creates moral hazard

Mar 1

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On Feb. 21, President Joe Biden approved $1.2 billion in student loan debt forgiveness to almost 153,000 borrowers under his Saving on a Valuable Education (SAVE) Plan. To qualify for this forgiveness, borrowers must have been repaying their loans for at least 10 years. Following the Supreme Court’s rejection of Biden’s initial student debt relief plan, the administration has implemented executive actions resulting in the cancellation of nearly $138 billion in student debt, impacting almost 3.9 million individuals.

Straight Arrow News contributor Star Parker argues that Biden’s student loan forgiveness spending spree has created a moral hazard, negatively impacting many who never attended college. Parker also sees the payments as a cynical ploy to buy votes for the upcoming November election.

The same Joe Biden who constantly rails about threats to democracy is trampling on the checks and balances the founders placed in our nation’s Constitution — and he is abusing taxpayer dollars in a shameless effort to buy votes in an election year.

While many news reports placed the cost of Biden’s latest bailout at $1.2 billion, American Federation of Teachers President Randi Weingarten puts the price tag at $4.9 billion. Weingarten went on to list more than $102 billion in student loan forgiveness during the course of the Biden-Harris administration, much of it targeted toward “public service workers.”

A White House factsheet went even further, claiming that Biden has approved nearly $138 billion in student debt cancellation. People who attend college generally make more money over the course of their lifetimes. Therefore, they usually have the ability to repay the loans, and those loans were granted with the expectation that they would be repaid. Many taxpayers who never went to college have made it possible for those students to get those loans and to reap the benefits of that investment.

Biden Brags and Breaks the Law with Another Student Loan Bailout

Last week, President Biden announced that he is canceling billions more in student loan debt. Biden bragged that he is doing so in spite of congressional objections and a Supreme Court decision that said he didn’t have the legal authority to conduct these taxpayer-financed giveaways.

The same Joe Biden who constantly rails about threats to democracy is trampling on the checks and balances the founders placed in our nation’s constitution – and he is abusing taxpayer dollars in a shameless effort to buy votes in an election year.

While many news reports placed the cost of Biden’s latest bailout at $1.2 billion, American Federation of Teachers President Randi Weingarten put the price tag at $4.9 billion. Weingarten went on to list more than $102 billion in student loan forgiveness during the course of the Biden-Harris administration, much of it targeted toward “public service workers.”

A White House factsheet went even further, claiming that Biden has approved nearly $138 billion in student debt cancellation.

People who attend college generally make more money over the course of their lifetimes. Therefore, they usually have the ability to repay the loans and those loans were granted with the expectation that they would be repaid. Many taxpayers who never went to college have made it possible for those students to get those loans and to reap the benefits of that investment.

By abdicating college graduates and selected public workers of responsibility to repay their loans, Biden is saddling taxpayers and consumers with the burden of his politically-motivated action. Millions of Americans faithfully repaid their student loans. Others who never attended college didn’t receive a government subsidy to prepare for their future employment. Nonetheless, they will have to pay higher taxes or face higher prices for consumer goods due to the inflationary impact of financing even greater government debt.

Biden’s action is creating moral hazard by sending the message that selected groups of people can be absolved of their financial obligations and that those obligations can be involuntarily transferred to others who have acted responsibly in handling their financial affairs.

Sadly, Biden is also undermining respect for our constitutional system of government. At a time when respect for the rule of law is breaking down on our streets and at our nation’s borders, the last thing we need is for the President of the United States to be bragging about how he is breaking the law.

 

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