COUNTERPOINT: 2 plus 2 is 5 in Biden’s student loan document


Someone once said that if you torture the data long enough, it will confess. Even still, it’s hard to manipulate the data to the point of being able to justify the White House student loan.

In other words, the numbers do not add up.

The claim is that nearly all graduates are under crippling levels of inescapable debt that will plague them for years, if not the rest of their lives. Therefore, widespread “forgiveness” is needed to save these borrowers. Yet even a cursory look at the numbers is enough to poke holes under the waterline of the White House student loan document.

First and foremost, debt cancellation is an understatement; the debt can only be actually forgiven by the creditor. All a third party, like the federal government, can do is transfer the debt. In this case, the White House is trying to transfer that student loan debt to you, the taxpayer, to bail out the borrowers.

So who are these borrowers? They are, on average, demonstrably better off than the average American. More than half of student debt is held by households with advanced degrees, including lawyers, doctors, and many other high-income professionals. The median annual income of professional degree holders is about $97,000, nearly double the median income of workers. Employees with a university degree or higher have seen their wages keep pace with inflation since the pandemic, while the average worker has seen their real wages fall by around 5%.

And college graduates have a much better chance of finding one of these higher-paying jobs. The unemployment rate for college graduates fell to 1.9%; there are only a few times in history where it has been less than that. There are 3.7 million more university graduates working today than in February 2020, before the pandemic. A student loan would have been a mistake before the pandemic. It’s obvious now.

The White House Student Loan is a solution in search of a problem. This is not to say that higher education and the student loan market are problem-free, far from it. But it’s laughable that the idea that bailing out borrowers with almost no restrictions solves the structural problems of financing higher education. Instead, this unconstitutional program will transfer up to $40,000 in debt from households earning up to a quarter of a million dollars a year.

The rationale for this student loan debt transfer doesn’t even pass the smell test. It’s sold as a way to help the less fortunate, but it’s really a transfer of taxpayers’ money from lower income people to higher income people. If high-income people need this help, low-income people certainly need even more help. Instead, those who have less will be forced to give to those who have more.

How much more? The interest-only break, which has been in place for more than 2½ years, will cost taxpayers $170 billion before a “pardon” even occurs. Meanwhile, the White House hasn’t bothered to calculate the projected cost of its student loan, which several empirical models peg at more than $500 billion.

The White House plan also reduces the amount new borrowers will have to repay and guarantees future installments. The cost to taxpayers will only increase over time, especially as colleges and universities now have an incentive to charge even higher tuition fees, knowing that larger loan balances will be borne by the taxpayer. .

President Joe Biden’s student loan is an incredibly inefficient use of taxpayers’ money and is totally unnecessary. High-income people should not be bailed out of the debt they voluntarily took on to fund educational opportunities that allowed them to earn their higher income.

Despite the rhetoric, the White House plan does nothing to make higher education more affordable. Instead, it encourages irresponsible behavior on the part of borrowers, lenders and schools – precisely the opposite of its assertions.

No matter what rhetoric or euphemisms are used, two and two will never equal five, and a student loan bailout will never make tax sense.


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