Now that the election is over … Biden not so sure about student loans
President Biden made a lot of popular promises heading into the 2022 Midterm Elections. Now that it is over and time to make good on his promises, Biden is laying back – suggesting that the voters need not look for them to be kept.
You may recall that prior to the election, Biden was promising to write off a billion dollars in student loans – giving the impression that those holding such loans would be debt free. When that promise proved to be both outrageous and impossible without causing great damage to the economy, Biden did modify that promise by admitting that his plan would not fully eliminate a person’s debt – and would not cover all borrowers.
Despite serious concerns about the constitutionality of Biden’s proposal, he still went ahead and ordered his Department of Education to start approving applications – as if it was the real deal. Millions of Americans applied and were accepted into the non-existing program…
As expected, the Federal Courts said, “Not so fast, Mr. President” – and they stopped the process until the Supreme Court could decide on whether Biden had the power to write off the debt or if he was abusing his presidential powers.
Personally, I think that the High Court will declare that only Congress – which has authority over the budget – has the power to write off financial obligations to the government. I mean really. What if a President issued an Executive Order that the holders of government bonds (the National Debt) did not have to be paid? Or if a President declared that the residents of New York did not have to pay federal income tax. Those are different issues, but the principle is the same.
The Student Loan Program was created and funded by Congress. The President (hopefully) does not have the power to arbitrarily adjust the income and obligations of the government in this or any other program or contractual agreement.
But we do not have to wait for the Supreme Court to pass judgment on the matter. Biden is already ‘fessing up that his bold proposal is not what was claimed at the onset. He is already hinting that his grandiose scheme is not likely to be fully implemented – and maybe not at all.
To compensate for the potential failure of his student loan forgiveness programs, Biden has once again ordered a moratorium on the monthly payments. This may sound good – even appealing – to those holding student loans. But it is not forgiveness. They will have to pay the full amount and interest according to the agreement.
Before they get too giddy about a few months without writing checks to Uncle Sam, they might want to consider that when payments resume, they will be in inflationary dollars.
I am afraid that Biden was bs-ing when he made that promise to millions of student loan holders. I think he knew that his plan would never pass muster at the Supreme Court … that it would increase inflation … and would also anger a lot of folks who have already paid off their — or their kids’ — student loans.
So, there ‘tis.