Student Loan Forgiveness - Why Now?

 

President Biden has announced a popular decision to forgive a significant portion of student college loans – popular, certainly, among the recipients of this largesse. Now there are complaints from some about how the program unfairly benefits higher-income earners, is unfair to those who have paid off their loans in full or to those who don’t plan to go to college at all. I am less concerned about the fairness issues than I am about the method and the timing.

Here the Democrats are, basking in the glow of significant legislative and early election victories. Money will be spent on infrastructure and climate change, a step has been taken toward gun control, and the federal government will negotiate with big pharma on Medicare drug prices, something that previous administrations have longed for but failed to accomplish. Gasoline prices are falling and President Biden’s ratings are rising. The Supreme Court’s ruling on abortion seems to have backfired, spurring voters, especially women, to vote Democrat, even in red states.

So why did Mr. Biden need this student loan forgiveness action now? Couldn’t it have waited until after the midterms, or even after a new Congress has been seated? I would have been a lot more comfortable if a loan-forgiveness program had been approved by the full Congress. Biden is sometimes very good at handing weapons to his opponents so they can beat him up with them. And the loan-forgiveness idea is not universally applauded by Democrats either. There are even questions about its legality.

I do have sympathy for students who are burdened with these loans well into their careers. But there are many related matters that need addressing. Some for-profit colleges have abruptly gone out of business. Tuition for established nonprofit schools, has way outstripped the cost-of-living increases for decades. Some of the wealthy institutions are sitting on huge endowments. What are they doing with them?

A degree from a fancy university doesn’t necessarily guarantee a living. These days, if you’re shooting for a big salary, learning a valuable trade in which you actually fix or build something might get you to six figures faster than a framed piece of paper. But that’s another story.

The President’s executive action may look a little bit like political pandering. The Democrats are doing fine without it, and I think the issue of student loans deserves wider attention than it’s getting because of the stroke of one person’s pen.