Biden's $10K student loan forgiveness is reverse Robin Hood
If college is worth taking student loans, why would the government need to forgive $10,000 of them?
President Joe Biden announced Wednesday that his administration would forgive $10,000 of student loan debt, for anyone who had it.
What he didn't speak aloud, but is true, is that every plumber, welder and cop in America will be footing the bill for people who chose to attend college, knowing they needed financial help to do so. Biden's announcement is reverse Robin Hood, taking money from the working class and giving it to the laptop class.
It is not the president's largesse or generosity that will fund this giveaway. It is taxpayer dollars. "We the people will be giving this money to a select few.
But why? Officially, Biden invoked the COVID-19 pandemic, which is three years old. Biden has shown a consistent preference for invoking the COVID emergency to further his ends. This is an easier path than building consensus, especially when consensus would result in sharing the credit.
Gov. Gretchen Whitmer operates from a similar playbook. After vetoing three tax cuts, Whitmer floated a sales tax holiday for school supplies, which she knew would not pass. Everybody would get a tax cut. But only Big Gretch could claim credit for the trial balloon — such as it is — and say she tried hard to deliver tax relief, but the Republicans would not let her. It's an odd way for the governor to treat the lawmakers she works with so well that she has so far been able to sign more than 900 laws.
Student loan relief leaves a disturbing question: Why would the same feds who give and back student loans now forgive them? If the borrower got what they paid for, and agreed to pay it back, on what grounds should relief be granted?
The only scenario where forgiveness makes sense is (a) if the loans were a scam and (b) if the scam had ended — as with the wave of for-profit colleges that faced legal trouble last decade.
Is that really the argument with student loans, that they are a scam? That the borrower had no way to beware, so pervasive was the scam, and now universal relief is needed? If that is not the argument, what is?
And if the loans are scams, why not forgive them all, and end the federal student loan system?
If borrowers did not get their money's worth for their loans, and need a portion of those debts forgiven, what has changed? Do we have any reason to believe we won't be here again in five or ten years, misusing another supposed emergency to forgive a new raft of debt?
Student loan forgiveness does not solve a single problem, but it will cause plenty. What kinds of choices will people make, now that they know Uncle Sam will foot the bill the next time a politician needs a good headline?
If college is a scam, we should treat it that way. If it is not a scam, student loan relief is buying votes, by another name.
Michigan Capitol Confidential is the news source produced by the Mackinac Center for Public Policy. Michigan Capitol Confidential reports with a free-market news perspective.