President Biden's latest attempt to cancel student loan debt is not only illegal but also fundamentally unfair to taxpayers and those who have already repaid their loans. This reckless move will only worsen inflation and open the door to demands for even more loan forgiveness in the future.
Washington Democrats have long used large federal spending and welfare programs to their political benefit. However, President Joe Biden's brazen attempts to buy good will by unilaterally canceling student loan debt are without historical precedent.
Just weeks after the Supreme Court shut down his previous efforts, Biden has unveiled new executive actions to let people off the hook for their loans. His federal agencies have also been working to make the student loan repayment process dysfunctional.
Let's recap how we got here.
Not so long ago, canceling student loan debt was a far-left policy. After Biden's election in 2020, he took unprecedented executive action. In his first attempt at loan cancelation, he tried a multi-prong approach based on the premise that Americans were continuing to experience financial pressures from the COVID-19 pandemic.
President Donald Trump had temporarily paused student loan repayment during the pandemic. Biden, however, extended this period long past any emergency. This flooded the American economy with extra cash, fueling Biden's inflation problem.
This didn't last. Nebraska's attorney general filed a lawsuit along with several other states, which went all the way to the Supreme Court. In a 6-3 decision, justices determined that the president had unlawfully used his executive authority, shutting down his first attempt.
Now, Biden is making another attempt and this time he wants to cancel debt for millions under what he's calling the "SAVE Plan." His administration is moving quickly—the Department of Education quickly announced it is wiping $7.4 billion off the books under this new plan, and then they announced an additional $6.1 billion.
Nebraska is also stepping up and suing again. After Biden's new announcement, our state joined a coalition of other states working to stop the Biden administration from making an end run around the Supreme Court.
The Biden administration's attempts to give people a pass on student loans isn't stopping with his executive orders. There's more: The president isn't just trying to let people off the hook for paying the loans they took out for college. His administration is actively trying to make it harder for contractors who service loans to ensure that they get paid back.
On the one hand, the Federal Student Aid (FSA) agency is paying contractors who service student loans less money and has acknowledged that the level of service for student loan holders will suffer as a result.
On the other hand, the Consumer Financial Protection Bureau—led by Massachusetts Democrat Sen. Elizabeth Warren's disciple, Rohit Chopra—is using its enforcement authority to pursue these contractors for the reduced levels of service that are a result of those same FSA cuts.
It's no surprise that many Americans have faced confusion about when their loans enter repayment. Instead of working to ease the path to repayment for borrowers, the administration is sowing confusion by undertaking a systematic attack on student loan servicing writ large.
Why do this? They're making a bet that demonizing servicers will ultimately move public policy in the direction they wanted to take from the start: toward massive loan forgiveness and away from any sort of repayment.
Americans can't let the Biden administration's plan succeed. Unilateral student loan forgiveness is terrible policy for multiple reasons. First, it's fundamentally unfair to Americans without a degree and those who have already paid their loans. They shouldn't have to pay for someone else's post-secondary degree.
Second, the impact of student loan forgiveness fuels inflation and will only make Biden's inflation problem even worse. And third, the Biden administration has opened a Pandora's box by forgiving non-emergency loans on a widespread basis. What happens when the far left starts clamoring for more? We can't simply hope that Biden or a future progressive leader will draw the line here.
It's time for America to show restraint. We need a return to principled fiscal policy from the White House that encourages Americans to exercise personal fiscal responsibility—a responsibility that underpins the health and success of the American free enterprise system.
