Democrats’ Backdoor Attempt to Cancel Student Loan Debt

During the 2020 Democratic primaries, few policy ideas received more attention and support from liberal voters than so-called student debt relief.

Every Democrat seeking his party’s presidential run – including Joe Biden – promoted some form of student loan debt relief that ranged from Biden’s $ 10,000 proposal to Bernie Sanders’ demand for full debt relief.

However, President Biden and the Democrats in Congress have so far refused to make debt relief a priority despite its popularity with left-wing voters.

Some may be tempted to attribute the Democrats’ decision to avoid prolonged debate on the issue to the unpopularity of debt relief among many major voter demographics. In fact, however, the Democrats have found a back door route to student debt relief that completely avoids the debate: they simply refuse to force borrowers to repay their loans.

Most of the student debt that was amassed during the Obama and Trump administrations relates to loans that came directly from the federal government. This is the single most important way college students pay for higher education today. Because the federal government controls many of these loans, it has the authority to allow students not to repay the debt. The Department of Education exercised this power during President Trump’s final year in office as part of Trump’s COVID-19 relief plan.

Congress reiterated the Trump administration’s decision in the CARES bill, which not only temporarily froze payments on federal student loans, but also reduced interest payments to zero and halted the collection of defaulted loans.

Originally, the student debt payment was only supposed to be suspended for 60 days, but the payment suspension has been extended each time a deadline approaches. The last renewal came in January when Joe Biden set the deadline for Jan.

Most Americans with federal student loans have not been required to pay a federal student loan in more than a year, even if they haven’t lost their jobs or otherwise faced severe economic consequences from the pandemic. And now the Democrats are proposing to postpone the deadline again, this time to 2022.

Senate Majority Leader Chuck Schumer (D-NY) speaks to reporters after a bipartisan group of Senators and White House officials discussed the Biden administration’s proposed infrastructure plan on June 23, 2021 in Washington, DC had agreed in the US Capitol. After the initial negotiations between the White House and the Senate failed, a new bipartisan group of Senators came together with the hope of reaching an agreement on a much-needed infrastructure spending plan.
Samuel Corum / Getty Images

On Wednesday, more than 60 Democrats in Congress, including Senate Majority Leader Chuck Schumer (NY), sent a letter urging President Biden to continue the debt freeze for at least another six months beyond the September deadline – if not by much , much longer.

“We ask that you extend the break by at least six months – until March 31, 2022 – or until the economy reaches pre-pandemic employment levels, whichever is longer,” the letter said.

The phrase “whichever is longer” is an immensely important part of what the Democrats in Congress are calling for. With the economy still lagging after more than a year of COVID-19 lockdowns, it’s impossible to say when employment will hit pre-pandemic levels.

The seasonally adjusted unemployment rate in January and February 2020, just before the pandemic began, was 3.5 percent – as low as any unemployment rate the Bureau of Labor Statistics has recorded since 1969. Pandemic “and the employment rate may never fully recover.

Calls for a further freeze in student debt are not confined to the convention halls either. In early June, during a Senate committee hearing, Education Minister Miguel Cardona announced that the von Biden government was considering extending the payment freeze further.

It’s not difficult to see how this supposedly temporary cessation of student loan payments could become permanent. The longer student debt holders remain in repayment, the more politically difficult it becomes for the Biden administration or a future Congress to resume payments, which some borrowers have in excess of $ 1,000 a month.

It is bad enough to cancel student loan debt in the midst of a sovereign debt crisis and a period of rapid inflation, but to do so without the consent of the American people, who one way or another will be forced to bear the cost – would be both ruthless and deeply immoral .

If taxpayers are forced to pay the bill for others’ college debts, at least the government can ask Congress to vote on it. Unfortunately, this seems increasingly unlikely.

Justin Haskins is a research fellow at the Heartland Institute and director of the Heartlands Stopping Socialism Project.

The views expressed in this article are one’s own.