Biden's student loan forgiveness rhetoric has lured many into borrowing
As The College Fix dramatically headlines, "Nearly 9 in 10 recent student loan borrowers bet on Biden bailing them out." Without actually promising or committing anything, Joe Biden has led many young people to believe that the federal government will cancel the loans they take out to finance a college education. A new survey indicates that the lure of borrowing without having to pay back has enticed many youngsters take on debt that they otherwise would not have committed themselves to.
An overwhelming 86% say Biden's pledge affected their decision to take on student loan debt.
Even worse, the prospect of "free money" has affected the decision to attend or continue college itself for a substantial minority.
When asked if they would have continued their education in the first place if not for Biden's campaign promises, 25% of recent borrowers say they would have been unlikely (18%) or very unlikely (8%) to go to or continue going to college.
Additionally, 30% of recent borrowers who are also currently enrolled in school say they are unlikely (21%) or very unlikely (9%) to continue going to college if Biden does not forgive some amount of student loan debt.
Biden has craftily raised expectations of loan cancellation without actually promising anything:
As Casey Bond put it in Money Magazine:
Biden has never signed on to the more expansive calls from some progressives to eliminate all student debt or wipe out at least $50,000 per borrower.
Instead, he has repeatedly said he's open to canceling up to $10,000 in federal student loans per borrower. (snip) The following month, Biden published a piece on Medium outlining the policies he said he believed were necessary to help Americans during the COVID-19 pandemic and beyond. One such policy included a proposal to "immediately cancel a minimum of $10,000 of student debt per person." And at a town hall one month before the 2020 election, he doubled down on his goal to "make sure everybody…gets $10,000 knocked off of their student debt."
Of course, that hasn't happened.
Any broad-scale assumption of student loan debt by taxpayers would require an expenditure of many billions of dollars, requiring Congress to pass legislation authorizing the spending. Such legislation is very unlikely to pass the current Congress, so there has been talk of "executive action." But a president cannot on his own authorize such an expenditure. To be sure, there are "budget tricks," such as President Trump used to build the border wall, including using money authorized for military spending. But that was a few billion dollars at most. I doubt there are reserves of already authorized unspent money for education that Biden could tap to give a free ride to student borrowers.
Education debt, ever since it was taken over by the federal government, is not dischargeable in bankruptcy. It will remain a financial albatross on the necks of students and former students for the rest of their lives. Luring people barely out of childhood into taking on large debts that will be hard to repay seems exploitative and would be censured if a private profit-seeking company engaged in such practices.
And, of course, the availability of debt has enabled colleges to increase tuition at astronomical rates.
It is a disgraceful con game.