According to Forbes Magazine, as of January 2021, 45.3 million Americans owed approximately $1.7 trillion in student loan debt. It is the second highest category of consumer debt (after residential mortgage loans).
The cancellation of this debt has long been a priority for many Democrats.
Democratic efforts to persuade President Joe Biden to cancel up to $50,000 in federal student loan debt per borrower by executive order have been met with resistance. It’s not that he opposes the idea, he just doesn’t believe it can or should be done by executive order.
Forbes estimates that this would cost approximately $1 trillion and “that might be the most expensive policy ever enacted by executive order.”
According to CNBC, Biden supports only $10,000 of debt forgiveness per borrower and prefers that “Congress crafts the legislation.”
During last week’s train wreck of a CNN town hall, Biden again poured cold water on the idea. He said he would “not make that happen.”
Rep. Pramila Jayapal (D-WA), hoping to rally support for this initiative, sent out the following tweet on Friday. “I want to hear from you. How would cancelling $50,000 of student loan debt help you and your family?”
Those with high levels of student loan debt responded as Jayapal had hoped they would. After all, who would turn down $50,000 in debt forgiveness?
However, there were quite a few replies that demonstrated the difficulties involved in implementing such a measure. For many, it just boils down to unfairness. The government would be gifting up to $50,000 to the 45 million Americans with student loan debt, while the other 285 million receive zero.
One user wrote: “Could I have the $50,000 I already paid put back in my bank account?”
Another replied: “Pls figure out what to give working class people who didn’t go to college to avoid this and feel they’re footing the bill with nothing in return.”
Biden may actually be right that he can’t forgive student loan debt by executive order. Forbes explains such a move could “invite a deluge of lawsuits and poison any chance for bipartisan cooperation on higher education reform in Congress.”
But, even if Democrats went through Congress to pass this legislation, there are still reasons why it’s a bad idea.
Aside from its inequity, it’s regressive. It favors higher income earners. Forbes cites an analysis by the People’s Policy Project which found, “the top fifth of households holds $3 in student loans for every $1 held by the bottom fifth.”
The logic is that those who hold more debt tend to have advanced degrees and typically have higher earnings (or earnings potential) than those with smaller amounts of student debt.
Forbes emphasizes that “forgiving debt sets a precedent. Student borrowers (and the colleges they attend) may rightly expect another cancellation to happen at some point in the future, when outstanding debt again climbs too high. This creates an incentive to borrow more in order to take advantage of that future jubilee. More perniciously, it gives colleges another reason to hike tuition.”
Elizabeth is the founder and editor of The American Crisis. She is also a contract writer at The Western Journal and a previous contributor to RedState, The Dan Bongino Show, and The Federalist. Her articles have appeared on HotAir, Instapundit, RealClearPolitics, MSN and other sites. Elizabeth is a wife, a mom to three grown children and several beloved golden retrievers, and a grandmother!