Commentary by Sanford D. Horn
August 31, 2022
Imagine you’re standing outside the best and most expensive restaurant in town. You don’t have a reservation, but no matter, you cannot afford the bill of fare at this fine establishment. Yet, the manager exits the restaurant, confronts you, demanding you pay the freight for a tableful of diners. Sounds unfair doesn’t it?
Now multiply those restaurant charges by millions and millions of dollars, and therein lies the insanity and even the unconstitutionality of Joe Biden’s vote buying scheme called the cancelation of student debt to the tune of at least $329 billion. According to the Penn Wharton Business Model, the price tag may actually reach $1 trillion. And consider the restaurant diner who is earning five or six times what his server is earning. A server now charged with additional debt while the diner is literally getting fat and happy on the server’s largess.
We, the taxpayers of the United States, are being told, by the power hungry Executive branch, that whether we attended college or not, whether we completed college or not, whether or not we paid our own way or paid back our loans, we are now on the hook for the debts accumulated and not paid back by self-absorbed, entitled Critical Race and Ethnic Studies or Sustainability degree holders. Those are two actual majors at Antioch College in Yellow Springs, Ohio. Biden indicated one-third of the debtholders have no degree.
For those who argue there are doctors and lawyers also benefiting from the taxpayers’ generosity, shame on them. The income potential for those borrowers is vastly higher than those with bachelor’s degrees, master’s degrees, or no college degree at all.
It’s a simple matter of a business transaction. These people wanted to get an education at one of America’s alleged institutions of higher learning. Not having the finances to fund this experience, either personally, or via ones’ parents, the student signs a legal document called a contract. The in-need student borrows a known amount of money from a lender with the understanding that said loan would be repaid within a set period of time. The vitally important aspect of these contracts that must, must, be amended is the borderline usurious rates of compounding interest. Those rates ought to be capped at two percent.
The Biden Borrowing Boondoggle only includes those responsible for paying federal loans, thus all other borrowers must continue repaying their loans, along with those the Biden plan is canceling. But in reality, nothing is actually canceled. The lenders have every right to be repaid - after all, the money was available when the students needed it. The schools already have their money. And the borrowers - sitting on the fence of childhood and adulthood, can continue their extended adolescence.
The Biden plan calls for “loan forgiveness” up to $20,000 for Pell Grant recipients and up to $10,000 for non-Pell recipients. Those earning less than $125,000 annually are eligible for this taxpayer funded bailout. This plan will cost every American taxpayer $2085.59 according to the National Taxpayers Union Foundation. This plan would benefit roughly 43 million debtholders, about 20 million of whom could see their entire debt eliminated.
Consider a research scientist earning $42,000 in Tennessee with roughly $25,000 in loans to repay. Because this individual’s loans are not federal, he or she is still responsible for the entirety of the loan. But an architect earning $100,000 in Massachusetts with $25,000 in federal loans to repay, would qualify for the taxpayer funded bailout - paid for in part by the aforementioned research scientist with a much lower salary and the same debt, now to be increased.
According to the Penn Wharton Business Model, 70 percent of the debt to be potentially forgiven would assist households in the top 60 percent of earners - thus redistribution upward. Additionally, 56 percent of student debt is held by those with graduate degrees - with even greater earnings potential. And according to the left-leaning Brookings Institute, one-third of all student debt is held by the wealthiest 20 percent of households. This unconstitutional plan would increase the deficit, already inflated under Biden, as well as raise inflation yet higher still. Ostensibly, this will punish and penalize those who paid their own way or fully repaid their loans.
The punish and penalize is aptly played out by a father confronting Senator Elizabeth Warren (D-MA) in Grimes, Iowa on January 20, 2020 as this plan had already been bandied about by Democrats during the presidential primary season.
Dad: I just want to ask one question. My daughter is getting out of school. I’ve saved all my money. She doesn’t have any student loan debt.
Sen. Warren: G-d bless you.
Dad: Am I going to get my money back?
Sen. Warren: Of course not.
Warren could not have been more callous and insensitive toward the father who asked a serious question. Why should he be saddled with additional debt after doing the right thing for his own daughter? Why is he now responsible for paying for someone else’s daughter?
House Speaker Nancy Pelosi (D-CA) has certainly changed her tune. On August 24 of this year, Pelosi said, “By delivering historic targeted student debt relief to millions of borrowers, more working families will be able to meet their kitchen table needs as they continue to recover from the challenges of the pandemic.”
Yet a year prior, on July 28, 2021, Pelosi had misgivings about this taxpayer funded bailout. “Suppose your child at this time did not want to go to college, but you’re paying taxes to forgive somebody else’s obligations. You may not be happy about that.”
Pelosi also said, on the same date in 2021, “People think the president of the United States has the power for debt forgiveness. He does not. That would have to be an act of Congress.”
Even Biden has flip-flopped on this issue. When asked on February 16, 2021 Biden said, “I don’t think I have the authority to do it by signing.” Yet now Biden is invoking the Heroes Act or Covid as giving him the authority to sign an executive order unilaterally employing the debt cancellations under “emergency circumstances.”
This is an illegal act, a violation of the separation of powers, and a circumvention of Congress. This is “extremely dubious,” said George Washington University constitutional law professor Jonathan Turley, who nobody would accuse of being a conservative. No doubt this ends up in court before a single debt is eliminated.
“It sends the wrong message,” said US Rep. Tim Ryan (D-OH), who nonetheless votes with Biden/Pelosi 100 percent of the time.
“This is no way to make policy and sidestep Congress,” said US Rep. Chris Pappas (D-NH).
This is about personal responsibility and accountability. If the debt is too much, perhaps Tom, Ricardo, and Sabrina should have opted for state schools instead of private institutions with price tags the size of Montana. Nobody forced anyone to attend a particular school, sign a contract, or major in unmarketable subject matter. But if personal responsibility is going to be shirked and propagated by the government, why not debt forgiveness on people’s home mortgages or automobile loans or small business loans - invoke Covid here too.
This system is broken. Between 1980 and 2020 tuition has increased 180 percent for full time students. In 1980 tuition costs averaged $10,231; but by 2020 those costs had risen to $28,775, with no ceiling in sight. The cancellation of student loan debt will simply signal to colleges and universities that they have carte blanche to raise tuition prices even higher. Tuition will rise the same way the price of electric vehicles has risen by the concomitant value of the government subsidies on those electric vehicles.
Former Education Secretary William “Bill” Bennett predicted in 1987 that more aid will cause tuition prices to become inflated. “Increases in financial aid in recent years have enabled colleges and universities, likely to raise their tuition - confident that federal loan subsidies would help cushion the increase,” Bennett wrote in a New York Times Op-Ed. Bennett, of course, was sadly accurate with his words from 35 years ago, while serving in President Ronald Reagan’s cabinet.
This proposal “doesn’t address the root problems that make college unaffordable,” said Senator Catherine Cortez Masto (D-NV).
Yes, the system is most certainly broken. But it can be fixed; or replaced. Instead of canceling student loan debt, cancel the entire federal loan program. This is not an endorsement of absolving all student loans - those absolutely should be paid back by the debtholders. Instead, all future education loans should originate with the colleges and universities themselves. These so-called institutions of higher learning should finally have some skin in the game. Some degrees are simply worth more than others; some degrees have more risk than others on a potential rate of return to the school/lender. That’s not to say someone can’t major in Community Leadership at THE Ohio State University, but perhaps a loan has a higher rate of interest than a loan to an engineering student - greater risk on the former rather than the latter. Furthermore, should a graduate of a particular school not be able to secure a job in his or her degree area within a year of graduation, the school should be required to begin paying back the loan. This will encourage college advisors to actually give worthwhile advice; otherwise, those jobs could be eliminated and save the schools some money.
How will these graduates make this country better? For all the malcontents bitching and moaning about this country, more concerned about their pronouns and tearing down statues of people they know nothing about because they never truly learned American history, what are they doing to make America great again? How is their philosophy degree or Exercise Science degree from Rutgers going to improve the economy? How will their Game Development and Design degree from Purdue help solve the problem of food deserts in this country? How will their Global Jazz Studies degree or Scandinavian degree from UCLA help cure Alzheimers? I enjoy jazz, but what employment doors would it open for me upon graduation?
US Rep. Alexandra Ocasio-Cortez (D-NY) foolishly accuses those not on board with this taxpayer funded bailout of being selfish. In reality, those supporting this boondoggle are the truly selfish ones expecting others to pay their debts. Nobody is forced to attend Kenyon College in Gambier, Ohio and pay $80,100 (kenyon.edu) - that’s per year, when they can attend THE Ohio State University for $26,451 (in-state). Yes, there is an infinitely different environment on a large campus versus a small campus, but a happy medium can be found. As of the 2019-20 academic year, there are 3,982 degree-granting postsecondary institutions in the United States. (National Center for Education Statistics) Choose responsibly. Make responsible decisions. Be responsible as a taxpaying American adult and pay your debts. The ironic hypocrisy is liberals demanding people/corporations pay their fair share, but want others to pay more than their fair share to give bailouts to the privileged and entitled.
There’s no such thing as a free lunch. Go to school, pay your tuition. Go to school, pay your loans back. To demand someone else do so is lazy and entitled, a terrible precedent for future generations. Kind of explains the abysmal work ethic that has unfolded in recent years - government handouts replacing a paycheck. Except those are not really government handouts; that money is coming out of the pockets of those taxpayers who already paid back their loans, did not need loans, or simply did not attend college.
Want to study the aforementioned subjects or any other fun, less marketable subjects, go right ahead, but don’t complain when you can’t find a job. Better yet, minor in those subjects, but major in a marketable subject allowing you to pay your debts and help make your country a better place. End the federal loan program, make the colleges shoulder the loan/debt repayment process to keep the American taxpayer out of this growing shell game.
Sanford D. Horn is a writer and educator living in Westfield, IN.
