In an effort to garner votes and secure what’s left of his approval rating, President Joe Biden announced Wednesday he will still be forgiving over $1 billion in student debt for roughly 153,000 borrowers who are enrolled in the Saving on a Valuable Education repayment plan. According to the new guidelines, some eligible applicants who borrowed less than $12,000 and have made 10 years of payments can have their debt forgiven.
The SAVE plan is Biden’s new, improved debt forgiveness scheme after his last one was shot down by the Supreme Court. It’s still wrong on principle.
In a 6-3 vote last June, the Supreme Court justices ruled that the Biden administration’s plan to cancel up to $400 billion was an executive overreach and Congress did not grant it, even through the HEROES Act. In November, congressional Republicans failed to overturn Biden’s new SAVE plan. During their negotiations, Republicans at one point said even the revised plan will cost taxpayers $559 billion.
Democrats are excited about this, of course.
“We have more work to do to cancel even more student debt, but today is a good day and we applaud the administration for continuing to work with us to help working families and particularly minority communities free themselves from the burden of this crushing debt,” Senate Majority Leader Chuck Schumer (D-NY) said in a statement.
Whether Congress approves or not, the whole concept is absurd, and it’s no better, in principle, than the one the Supreme Court reviewed and rejected. Here’s an example Biden himself proffered to voters that demonstrates this well.
Dr. Jessica Saint-Paul, a physician’s assistant and community college educator, introduced Biden at an event on Wednesday. She said she originally borrowed $95,000 in loans to pay for three degrees, including a doctorate. After 18 years of paying them, she still owed $144,562. Now, thanks to Biden’s program, she owes nothing.
She’s a new mother; she may not be working now, but according to Glassdoor, a physician’s assistant in California can make up to $200,000 a year. That seems like a decent return on investment; even better now that Biden has wiped out her loans. It’s not even clear how she qualifies, given the amount.
Biden’s plan is wrong in principle and robs the people who owe that debt their opportunity to understand the consequences of financial decisions, to continue to work hard, and to make good on their promises — even if it’s owing lots of money and even if some students took on the debt ignorant of reality. Biden’s plan also robs people who did not go to college, who still work hard, and essentially subsidize these debt forgiveness programs.
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In economics, there is always a transfer of money, a trade-off: A waitress in California, hoping to make it in Hollywood, and who never incurred such debt, will pay for Saint-Paul to be free of her loan shackles. How is this fair?
So close to the November 2024 election, Biden is not even hiding that he’s trying to woo voters with a sham payoff system that affects only a precious few. Still, it sends a message to hard-working people who have either paid their loans or who never incurred any in the first place that principles and hard work really don’t matter.
Nicole Russell (@russell_nm) is a contributor to the Washington Examiner’s Beltway Confidential blog. She is a mother of four and an opinion columnist for the Fort Worth Star-Telegram in Texas.
