EDITORIAL: Federal Funds Should Relieve Pandemic Peril, University Loans Not
ANALYSIS / OPINION:
No expense should be spared in the battle to defeat COVID-19, but the pandemic should not be used as an excuse for rampant government bailouts. While federal dollars necessarily flow freely to fund life-saving vaccines, the debt accumulated by students nationwide does not deserve the same emergency treatment. Forcing all taxpayers to add the financial burden of others to theirs would be fundamentally unfair.
Congressional Democrats are urging President Biden to wield his pen to relieve students of up to $ 50,000 in federal loans. The White House is considering its own, less expensive relief plan that would limit the forgiveness of student loans to $ 10,000. Both proposals aim to ease the financial hardship of young adults during the virus crisis. Meanwhile, Biden has extended a Trump-era student loan suspension order until October 1.
With cumulative student debt totaling over $ 1.5 trillion, Democrats want the president to go big: “By writing off up to $ 50,000 in federal student loan debt for borrowers, President Biden can take the lead. most effective executive measure available to provide a massive stimulus to our economy, help narrow the racial wealth gap and relieve this impossible burden on tens of millions of families, ”Senator Elizabeth Warren of Massachusetts wrote in a statement Thursday .
“A massive stimulus” would not be, according to the Committee for a Responsible Federal Budget. Canceling the total amount of student debt, the budget watchdog says, would only give the US economy a small boost, between $ 115 billion and $ 360 billion. Further, the organization writes, “a significant portion of the debt cancellation would go to those with higher incomes and those who maintained their incomes during the current crisis.” Therefore, low-income workers with less college education and fewer loans would benefit little from the remission plans.
Moreover, the “progressives” were pushing for the cancellation of student loans before the coronavirus crisis hit a year ago. In 2019, figures like Ms Warren and Senator Bernie Sanders of Vermont were running for president on the promise of a free college for all. Their campaigns failed, but the economic recession caused by the plague offered their ideological counterparts a chance to win college debt cancellation as the next thing to do.
If Mr Biden chooses to help indebted students, he could choose to extend the current freeze on payment obligations. To reduce student loan balances nationwide, he could reverse the 2010 federal takeover of the student aid program. The Obama-era movement provided virtually unlimited funds for students to borrow, giving colleges leeway to increase their tuition fees. As a result, tuition fees increased 37% on average between 2008 and 2018, according to the Center on Budget and Policy Priorities.
The pandemic should not be used as a reason to force taxpayers, including those who have never had a college education, to repay the loans of those who have. It’s not American.