President Biden has repeatedly made various claims about his student loan forgiveness boondoggle. From clearly false statements that this unilateral executive action was “passed by Congress” to just which Americans will benefit from the program, Biden has tried to spin his plan as anything but buying elite votes. Recently, Biden wrote in a CNN op-ed that his loan bailout will specifically help working- and middle-class Americans. But is that true?
President Joe Biden
Mostly false or misleading. Significant errors or omissions. Mostly make believe.
President Biden has touted his student debt cancellation plan as a boon for working- and middle-class families burdened by too-expensive university tuition rates. But the truth is that the primary beneficiaries of any student loan bailout are those in the upper middle class who are already doing well. Meanwhile, middle-class taxpayers, and especially working-class Americans, end up footing the bill and consequences of decades of policies that have widened the gap between those with a college degree and those without.
If the administration were to forgive every dollar of the 1.8 trillion in outstanding student loan debt, the top quintile of income earners would stand to benefit by $7 for every $1 that flowed to the bottom of the income spectrum. People sometimes find this fact counterintuitive—why would the already-wealthy be borrowing vast sums for higher education? But the reality is that while the ultra-rich 1 percent are probably paying in cash, well-off American families are the ones loading up on student loans. That’s because high college costs have increasingly been locking out the bottom half of the income spectrum from even attending college. Today, a smaller percentage of college students roaming the typical campus are from families in the lower half of the socioeconomic scale than back in 1970, when government student loan programs were introduced. The children of the elite are the ones getting degrees, and so the children of the elite are the ones getting this taxpayer-funded bailout.
Since the days of LBJ, American taxpayers have invested trillions and trillions of dollars in the belief that going to university was both an economic and intrinsic good so that public investment would be returned to the body politic in both dollars and in wise voting citizens and community leaders. The choice to heavily subsidize that “track to success” has come with enormous costs, from bankrolling skyrocketing tuition for greedy universities to making the job market more difficult for those who chose to avoid both college debt and indoctrination. Perhaps the most devastating consequence has been the cultural takeover of virtually every elite American institution by recent college grads spouting the dogmas of the approved woke religion.
And now, to add insult to injury, those who avoided the ideological credentialling and debt treadmill are being asked to pay for the loans for those who did not.
Biden’s loan bailout doesn’t help working-class families. Instead, it disproportionately accrues to those already well-off, and those institutions, like universities, that have made life both economically and culturally more hostile for those same families Biden promises to help. Worse, this massive bailout does nothing about college cost or the underlying dynamics of the debt problem. Within four years of this proposed bailout, if it passes legal scrutiny, the level of student loan debt will be back to where it is right now, and taxpayers will again be asked to solve the problem.
We can all agree that college has become too expensive, and that the number of Americans who have unsustainable levels of debt from worthless degrees has grown too high. But fairness demands that taxpayers ask those who have actually contributed to the problem—most prominently universities, which hold more than $700 billion in endowments—to be part of the solution, not American families already struggling with inflation and economic downturn.