No expense should be spared in the battle to defeat COVID-19, but the pandemic should not serve as an excuse for unbridled government bailouts. While federal dollars necessarily flow freely to fund life-saving vaccines, debts accumulated by the nation’s students don’t deserve the same emergency treatment. Forcing all taxpayers to add the financial burdens of others to their own would be fundamentally unfair.
Congressional Democrats are urging President Biden to wield his pen in relieving students of up to $50,000 in federal loans. The White House is mulling its own relief plan, a less expensive one, that would limit student loan forgiveness to $10,000. Both proposals are meant to ease the financial struggles of young adults during the virus crisis. In the meantime, Mr. Biden has extended a Trump-era student loan repayment suspension order until Oct. 1.
With cumulative student debt totaling more than $1.5 trillion, Democrats want the president to go big: “By cancelling up to $50,000 in federal student loan debt for borrowers, President Biden can take the single most effective executive action available to provide a massive stimulus to our economy, help narrow the racial wealth gap, and lift this impossible burden off of tens of millions of families,” wrote Sen. Elizabeth Warren of Massachusetts in a statement Thursday.
“A massive stimulus” it would not be, according to the Committee for a Responsible Federal Budget. Cancelling the full amount of student debt, says the budget watchdog, would provide only a puny boost to the U.S. economy of between $115 billion and $360 billion. Moreover, writes the organization, “a large share of debt cancellation would go to those with higher incomes and those who have maintained their income during the current crisis.” Consequently, lower-income workers with less college and fewer loans would benefit little from the forgiveness plans.
Moreover, “progressives” were pushing for student loan cancellation before the coronavirus crisis struck a year ago. In 2019, the likes of Ms. Warren and Sen. Bernie Sanders of Vermont were running for president on the promise of free college for all. Their campaigns failed, but the pestilence-caused economic downturn has presented their ideological ilk with a chance to win college debt cancellation as the next best thing.
If Mr. Biden chooses to assist those with student debt, he could opt to extend the current freeze on payment obligations. To shrink student loan balances nationwide, he could reverse the 2010 federal takeover of the student aid program. The Obama-era move provided virtually unlimited funds for students to borrow, giving colleges leeway to jack up their attendance costs. Consequently, tuition rose 37 percent on average between 2008 and 2018, according to the Center on Budget and Policy Priorities.
The pandemic should not serve as a reason to force taxpayers, including those who never enjoyed the benefit of a college education, to pay off the loans of those who have. That’s un-American.
By THE WASHINGTON TIMES – – Monday, February 8, 2021