Last week, President Biden signed legislation to raise taxes on the middle class. Now, the President is transferring $10,000 in student loan debt for highly educated, rich borrowers. And who pays for it? Hard-working Americans who either already paid off their debts or never incurred debt in the first place.
Per the Penn Wharton Budget Model, Biden’s debt transfer would cost at least $300 billion, and most of the benefits would go to households in the top 60 percent of earners.
Even liberal economists warn Biden’s bailout for the rich, like lawyers who have the earning potential to pay off their loans, would only fuel more inflation. Former Obama-Biden economic advisor Larry Summers, who warned that the American Rescue Plan would cause inflation, said, “student loan debt relief is spending that raises demand and increases inflation.”
With the worst inflation in 40 years, working families are already paying an extra $536 per month. Higher costs are the last thing they need.
In addition to making inflation worse, transferring student debt does nothing to curtail runaway costs in higher education, including graduate schools that charge more and more while delivering less and less.
Forgiveness without accountability is a free pass for failed programs with high costs and poor outcomes and would be a green light for colleges to continue tuition hikes. Indeed, taxpayers may face more costs in just a few years when student debt returns to its current level.
President Biden promised to help working families. He has broken that promise by bailing out high earners and irresponsible universities at their expense. His actions are unfair to everyone who didn’t take on student loans or made sacrifices to pay their loans. And they would make inflation worse.
Americans cannot afford Democrats’ radical agenda.