The Inflation Expansion Act

The Inflation Expansion Act August 29, 2022

 

By executive order, President Biden is canceling much of the college debt incurred from student loans.  His measure will pay off $10,000 for former students making under $125,000 per year or $250,000 per couple.  Former students who also took Pell Grants, outright grants given to lower-income recipients, will get $20,000 of debt relief.  The average student loan debt is $39,351, with an average monthly payment of $393.

The administration is calling this action an extension of the HEROES Act, the 2003 law that allowed for suspension of student loan payments during national emergencies, the emergency back then being the 9/11 terrorist attacks. and the wars in Afghanistan and Iraq.  Today our national emergency is COVID.

HEROES is an acronym for “Health and Economic Recovery Omnibus Emergency Solutions Act.”  Is COVID still a “national emergency”?  And are the difficulties recent graduates have in repaying their loans really related to COVID?  Haven’t they been complaining about this long before the pandemic?

Referring to the debt relief package as the “HEROES Act” is more Orwellian language, like calling the recently-passed bill for climate, healthcare, and raising taxes the Inflation Reduction Act.  The justification for that title is that the increased taxes and more money for the IRS would reduce the deficit by $102 billion over 10 years.

Well, the student loan forgiveness will cost over $330 billion over 10 years.  So much for the much-hyped savings of the previous bill.  As the Wall Street Journal editors quipped, a more accurate name for the student loan package would be the Inflation Expansion Act.

The executive action also prolongs the COVID-relief moratorium on having to make payments on student loans, which has been in place since 2020,  through to the end of the year, which will cost another $15-$20 billion.

The true cost is likely to be even more.  Will freshmen enrolling this fall expect to pay back all of their student loans, if the upper classmen and recent graduates didn’t have to?  In government, one-time relief measures easily turn into entitlements.  Expect for the government to start subsidizing $10-$20,000 or more of everybody’s college expenses from now on.

And, once that happens, since the soaring cost of college has already been enabled by easy-money federal loans, expect colleges and universities to raise their prices another $10-$20,000.

The name of the program is telling.  When the HEROES Act was first authorized, our heroes were members of the military, police officers, and firefighters.  Today our heroes are evidently college kids and recent graduates.

Soldiers, cops, and firefighters likely don’t have a college degree.  But they, along with the 65% of Americans who don’t have a bachelor’s degree will be paying for those who do.

This measure will benefit the Democrats’ main constituents, affluent college graduates.  Over the course of their careers, they will make much more than the proletariat, whom leftists used to care about.  For their financial woes, they are being told to “improve themselves” by going to college, as if blue collar workers–upon whom our productive economy depends–are of less value than white collar  college graduates.

I know from personal experience, as someone who has drunk higher education to the dregs myself, sent three children to college, and spent some four decades as a professor and administrator in academic, that having to repay student loans is difficult for graduates just starting their careers.

But this debt relief plan is just unfair–to those who have already paid off their student loans, to those who will be taking loans in the future, and to taxpayers who didn’t go to college but now have to pay the bill for those who did.

UPDATE:  To those who are arguing that President Biden’s “forgiving” student debt is like Jesus forgiving our sins, so that Christians shouldn’t object, Kylee Griswold points out that the whole point of the Gospel is that our debts to God are paid in full by the sacrifice of Christ.  Yes, the government is paying off the debts by forcing taxpayers to cough up the money, but that is stealing, not atonement.

Illustration by Marco Verch, via Flickr, Creative Commons 2.0

 

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