Federal Student Loan Hand-Out Part 2: After-Math

Well, as you might imagine, Mr. Biden’s announced partial federal student loan forgiveness plan wasn’t viewed as heaven-sent by all.  And especially by the millions of Americans who won’t be in line for this federal fiscal (national-debt-forgetting) blessing.  That is by all of those responsible loan recipients who worked, saved, and paid off their loans, or who worked extra jobs during college so as to pay their own way without loans, and/or those Americans who did not attend four-years of higher education, interned or trained, went to work and now must join with that much larger taxpayer chorus to share in paying off the loans of the potentially federally-anointed.  Potentially, because this move by the president may well face a future court challenge.  Why, you ask?  Because many legal analysts and others consider his plan to be unconstitutional.

Wrote columnist Rich Lowry: “What the (forgiveness) policy lacks in fairness and coherence, it makes up for in dubious constitutionality.”  That’s because the Constitution clearly indicates that it is the legislative branch which holds “the power of the purse.” Those who previously questioned the constitutionality included none other than House Speaker Nancy Pelosi who reportedly just last year said the following on this subject: “People think that the President of the United States has the power for debt forgiveness.  He does not.  He can postpone.  He can delay.  But he does not have that power. That has to be an act of Congress.  The President can’t do it.  So, that’s not even a discussion.” However, as you might well imagine, her position has now suddenly undergone a 180-degree political conversion!

Primary Constitutional concerns aside, the administration feels that it has the power to “forgive” such loans under the “Heroes Act of 2003.” Like most things seemingly coming out of that regal brain-trust, this interpretation is well beyond a stretch.  The “Heroes Act” was enacted during wartime (Iraq) and applies to military operations and/or a national emergency.  Specifically: “…persons who have suffered direct economic impact hardship as a direct result of a war or other military action or national emergency.” Back then, it was enacted to protect deployed active-duty and National Guard troops, serving our nation in combat, from falling behind on their own college loans, in order to prevent them from being penalized.  We are under no such emergency now, nor is that status assigned any longer to the recent past covid pandemic.

Wrote noted George Washington University law professor, Jonathan Turley: “President Biden is something of a constitutional recidivist when it come to executive overreach.  He has been repeatedly found to have violated the Constitution in his unilateral use of executive powers.”  Turley continues: “It was not long ago the administration was telling courts that the pandemic was effectively over, in order to stop the use of Title 42 at the border.  It’s now claiming that the pandemic is raging in order to justify this massive debt cancellation.”

Along with the Constitutional question and interpretation of the Rule of Law, the federal student loan forgiveness plan is considered to be unfair, particularly when it comes to the millions of hard-working Americans, who did not attend college, and now are being potentially (pending legal review) forced to pay a portion for those who did.  Right now, analysists have calculated that cost to each taxpayer will eventually be a bit above $2,000.  Not what families who are currently stretched financially due to inflation, want to hear.  And the concern is that it is the wealthier individuals/families who will benefit the most vs. the middle and lower classes for whom this was, in theory, designed to help. Wrote Inez Stepman, in this regards: “It’s Robin Hood in reverse.  It robs from the poor and gives to the rich. It’s about rewarding Democrats’ key constituencies: the upper middle class and universities operating as essential training grounds for the left’s cultural revolution.  It’s that simple.  And cynical.”

Senator Tom Cotton (R-Ark.) voiced serious concerns on “Fox & Friends”babout the “fairness” of the forgiveness plan: “It’s deeply unfair. Just think about all (those) who never went to college, who got a job, started a small business.  They’re not getting their small business loans paid off. There’s no such thing as loan cancellation or loan forgiveness.  It’s just a matter of who pays it. Now its hardworking taxpayers who are going to be paying the bills for this and that’s just going to encourage university administers to raise tuition higher. This is going to hurt so many Americans.” And this response from columnist Matt Vespa: “Mr. Biden’s student loan decision will not do enough to help the most vulnerable Americans.  It will, however, provide a windfall for those who don’t need it….with American taxpayers footing the bill.”

On the subject of the universities place in all of this, Daniel Greenfield has some hard-hitting thoughts. Wrote he, in frontpagemag.com: “Government institutions are in the business of making things worse in order to collect more money to make them better.  Biden’s illegal trillion-dollar bailout (some sources now actually have the extended cost that high!) shows that the real customer of the educational industry is the government.  And what the government wants are woke illiterates who know party dogma, but can’t make their way through a simple sentence or handle cash register addition. Education is about everything except basic skills and competencies.  A college degree is a mark of cultural affiliation, a badge of political allegiance, and a warning sign of basic illiteracy. The educational system long ago sold out the country for political radicalism.” As warned, Greenfield’s feelings are tough, and they are his(!), but certainly not the totally true status of all of our colleges and universities.

However, our elite universities are doing quite well when it comes to their endowments.  “Ten of the top U.S. universities have endowments worth more than $200-billion each.  Perhaps some of these exceptionally healthy elites in higher education could help with some selective loan forgiveness, rather than having it all land in the laps of taxpayers?

Said Representative Ralph Norman (R-S.C.) on a recent television program, regarding this loan forgiveness plan proposed by Mr. Biden: “He is intent on buying votes, which he thinks this will do. And it’s such a slap in the face of those who didn’t attend college.  It’s a slap in the face for those who are (now) going to be saddled with this debt.  And everywhere I go in South Carolina, people are livid about this. It’s not fair.”  And Rep. Norman added: “I think the lawsuits will come.”

There are a number of things yet to be clarified, should this student loan presidential edict actually pass court review.  Mr. Biden’s plan calls for “only” partial loan forgiveness.  One prominent Progressive Democrat Senator commented that this was “only step one” following the announcement. Does that mean the president, in weeks or months ahead, actually plans to increase the forgiveness rate, perhaps even to the point of total loan forgiveness?  Is this only a “teaser” plan at the partial forgiveness level?  Forgiving it all would be a federal debt disaster, not to mention other significant negatives.

Another issue, yet to be clarified: Is this partial forgiveness a one-time action or will this continue each year of Mr. Biden’s reign in office?  In other words, should this year’s new college enrollees assume or expect that their new federal student loans will be forgiven, in whole or in part, in the future? Again, assuming this forgiveness plan passes court muster, will it be increased in forgiveness amount at some point and/or continue in some form over succeeding years? Important to remember that the Progressives behind the throne really want all student loans to be totally cancelled out.  If that should ever become the case, why would anyone continue to pay his/her own way to college?  There is much that remains to be answered or revealed.  And right now, none of those potential revelations stand to be good for a free, non-socialist, America.

(Constitutionality quote & Pelosi quote & definition of Heroes Act provisions via jewishworldreview.com, Rich Lowry, 8-29-22; Turley quotes via foxnews.com, Brianna Herlihy, 8-26-22; Stepman quotes via dailymail.com, Inez Stepman, 9-1-22; Senator Cotton quote via foxnews.com, Staff, 8-26-22; Vespa quote via townhall.com, Matt Vespa, 8-26-22; Greenfield quotes via frontpagemag.com, Daniel Greenfield, 8-31-22; Elite universities billion-dollar endowments via foxbusiness.com, Thomas Catenacci, 8-24-22; Congressman Norman quote via justthenews.com, John Solomon, 8-30-22).