If you think inflation is bad now, wait until Biden cancels billions in college loans | Opinion

During his campaign, President Joe Biden floated the idea of student loan debt forgiveness, wiping millions of monthly payments clean. After 16 months in office, he’s revisiting that idea, telling a group of reporters at the White House that he was “taking a hard look” at canceling federal student loan debt and would decide in weeks.

While Biden has said $50,000 in individual student debt forgiveness is too much, he did mention $10,000 on the campaign trail. Whatever the amount, this is one of Biden’s worst ideas yet. Canceling student loans, offering “student loan debt forgiveness” — whatever you call it — an idea by any other name never stunk so bad.

Numbers vary, but there are an estimated 43 million federal student loan borrowers. Student debt affects a significant number of Texas students. During the 2019-20 academic year, 37 percent of Texas students had student debt, and 58 percent of students in their fourth year of pursuing a bachelor’s degree had student debt, according to the Austin-American Statesman.

In 2021, over half of Texas students completing college with a bachelor’s degree left with debt.

The average student loan amount nationwide varies: Some statistics suggest it’s around $28,000; others say it’s as high as almost $37,000. Depending on the amount, students and adults are paying around $300 monthly.

Sure, any adult who pays rent or a mortgage, a car loan, student loans, and monthly Amazon Prime/Hulu/Netflix/Starz/HBO/Disney+ subscriptions would love to have a small percentage of their monthly budget wiped out by a magical fairy operating as a really forgiving president, but the idea is asinine on many fronts.

The president doesn’t have executive authority to wipe clean a debt knowingly and purposely accrued. The federal government issues more than 90 percent of all student loans, and the rest are owned by private banks and managed by the government.

Biden’s team has taken a cue from Harvard lawyers who suggest playing semantics with the Higher Education Act to justify his use of authority. It’s baloney. The president is not a genie with unfettered power.

Forgiving student loans would add to inflation because that’s how the economy works.

What do you think people will do when they suddenly have an extra $300-$400 a month? That’s enough for a small car payment (unless Biden wipes those loans clean, too!), or to put down towards a vacation or even a home. This sudden influx of spending into the marketplace will cause inflation to go up even further.

It also would hurt the federal government’s bottom line: Canceling $10,000 per borrower would cost the federal government around $373 billion, while the estimated price of eliminating $50,000 per borrower would tally near $1 trillion.

Unless Biden targeted his student debt relief, any program would disproportionately benefit the middle and upper class. In 2019, households with graduate degrees owed 56% of the outstanding education debt. Do doctors and lawyers need this giveaway? And that’s to say nothing of people who responsibly paid for their or their child’s tuition in cash or paid off loans early through sheer determination and hard work.

This aspect of loan forgiveness, particularly, coupled with what it suggests about responsibility, fills people with white-hot rage. It juxtaposes two things people hold dear: money and personal responsibility. Erasing loans from the middle and upper class, loans they knowingly accrued to earn a degree that would then allow them to earn a top salary, negates any personal responsibility and allows them to walk away with thousands of dollars. It’s unethical.

The effect of loan forgiveness would be that working class people who didn’t even go to college are helping pay off the loans of those who did and earn more. It reeks of a new kind of Western socialism.

Biden’s loan forgiveness program would be an effort to equalize income and spread debt and wealth around in one fell swoop. It would punish people who have worked hard, and fail to reward those who have.

Socialism fails every time it’s tried. Biden should not try it here.

Nicole Russell is an opinion writer for the Fort Worth Star-Telegram.

Fort Worth Star-Telegram