College graduate

There are few things more divisive in America right now than a college education. Among every demographic, a person’s level of educational attainment strongly correlates with what party they support — stronger than income, sex, and often even race.

It is unfortunately not surprising, therefore, that President Joe Biden is planning the largest government bailout since the 2008 financial crisis, the vast majority of which will go to wealthy college graduates who overwhelmingly support the Democratic Party.

The federal government has suspended payments on student loans six times since COVID-19 shut down the economy in March 2020. Now the Education Department has told student loan servicers not to send out billing notices for payment resumption in September, implying a seventh extension that will most likely extend at least through the midterm election.

The only remaining drama left before Election Day is whether Biden will take the extra step of announcing permanent executive action to cancel a reported $10,000 per borrower. The Education Department has reportedly developed detailed plans to do exactly that.

Biden’s giveaway to college graduates would reportedly be limited to people earning less than $125,000 a year and families making less than $250,000 a year. But the Education Department does not have data on how much money people with student loans currently make.

To implement the income cap without salary information, the Education Department will have to let borrowers self-report their income through an online application. Well-to-do college graduates seeking a handout from less privileged taxpayers would be on the honor system. The possibility of fraud in this system is staggering.

Setting aside the fraud problem for a moment, the estimated $377 billion in debt forgiveness would be no different economically than mailing every college graduate a check for $10,000. Considering that the economy is already experiencing record inflation, maybe the government shouldn’t be printing $10,000 checks and giving them to the wealthiest households — which is what college graduates are. According to data compiled by the Brookings Institution, the top 40% of income earners owe more than two-thirds of all student debt, and the richest 20% owe 35% of it.

The Government Accountability Office recently released a report showing that the Department of Education underestimated the cost of its student loan program by $311 billion between the years 1997 and 2021. The Education Department had estimated that student loans would net the agency $114 billion over that time frame. Instead, it cost taxpayers $197 billion.

If everyone benefited from student loans, then maybe there would be an equitable case to be made for expending these resources on loan forgiveness. But less than 40% of people in the United States graduate from college. And those without college degrees earn far less than those who have them.

Worse, as mentioned before, college graduates increasingly vote overwhelmingly for the Democratic Party. Giving away taxpayer money to a group that reliably votes for the incumbent this close to Election Day needs to be called what it is: a bribe.

The Washington Examiner

The Washington Examiner

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