When Joe Biden’s attempt to bring student loan debt relief via a scheme that promised to erase up to $20,000 of debt for millions was brought to a screeching halt by the Supreme Court last week, many saw it as a win for fiscal responsibility. With a decisive 6-3 ruling, the court’s rejection reflected the sentiment of most Americans wary of the policy’s implications for a massive wealth transfer.
Biden moved quickly to slam the decision, branding it as “wrong” and “disappointing.” Yet, as Republican National Committee (RNC) Chairwoman Ronna McDaniel pointed out, Biden’s proposal unfairly targeted Americans who responsibly paid off their loans, saved for college, or pursued alternative career paths. This wasn’t a mere rejection of debt relief but a clear message against the Biden administration’s constant undermining of hard-earned American values.
If you fall for Biden’s false promise a second time, shame on you. Biden will lie and cheat to get votes. The man has no shame.https://t.co/eVYnKDVdBY
— Curtis Hebert (@CurtisHebert) July 1, 2023
“Americans saw right through this desperate vote grab,” said McDaniel, a statement that struck a chord with many voters who observed the loan forgiveness plan as nothing more than a tool to secure electoral support.
Biden, however, remains undeterred. Despite the rebuke, his administration is now pivoting to the Higher Education Act as an alternate route to cancel a staggering $430 billion in student loan debt. This maneuver involves a “rulemaking” process that excludes Congress once again, which is expected to last several months and will keep debtors from being classified as defaulters for missed or late payments.
The newly proposed plan aims to reduce monthly payments for undergraduate borrowers from 10% to 5% of discretionary income. According to the administration, this will save students approximately $1,000 annually. Additionally, loan forgiveness would be offered to borrowers with $12,000 or less owed after ten years of payments rather than twenty.
While the President’s renewed effort to bring relief to borrowers, particularly those at the “bottom end of the economic scale,” may initially appear laudable to some, it fails to consider the underlying issue – the federal government’s illegitimate and outsized role in education funding. By simply offering relief without addressing the actual cost of education, the problem is perpetuated rather than solved.
As then-House Speaker Nancy Pelosi once noted, the President does not have the power to forgive debt. This is a legislative matter, a fact that the current administration conveniently overlooks in favor of unilaterally deciding the financial fate of millions of Americans.
The court’s decision has put more pressure on the White House from its progressive voter base. Progressive figures such as Sen. Elizabeth Warren (D-MA) and Rep. Alexandria Ocasio-Cortez (D-NY) are already calling for more aggressive action.
Interestingly, even with this pressure, a Reuters/Ipsos poll showed that only 53% of all Americans supported Biden’s original loan forgiveness program. This figure starkly contrasts the 81% of Democrats who did. This suggests that the public may be increasingly skeptical of such sweeping policy decisions, especially those bearing heavy financial implications.
Regardless of the path that Biden’s administration chooses to navigate, it’s clear that there is a divide between party lines and different visions of American values. And while the path of fiscal responsibility may not be the easiest, it is undoubtedly the most sustainable for the long-term health of the nation’s economy.