The decade's most triggering comedy
The policy, which would nix $10,000 in student loans per borrower earning annual salaries less than $125,000 as well as $20,000 per borrower who paid for college via Pell Grants, was enacted via executive order last fall. Justices will hear arguments in two cases, one which was filed by six Republican attorneys general and another which was filed by the Job Creators Network Foundation, a conservative-leaning advocacy group.
“Student loans are merely a symptom of the underlying disease of out-of-control college tuition that has grown by more than twice the inflation rate over the past few decades,” Job Creators Network Foundation President Elaine Parker said in a statement provided to The Daily Wire. “Biden’s loan forgiveness program would only worsen this problem by failing to hold colleges accountable and giving them a blank check to continue price gouging. By blocking this student loan bailout process, the Supreme Court can set the stage for bipartisan action to effectively reform the higher ed cartel and reverse runaway college costs burdening so many.”
The complaint from the foundation contends that the Biden administration policy violates the notice-and-comment processes mandated by the Administrative Procedure Act, which ensures that “affected parties have an opportunity to participate in and influence agency decision making at an early stage, when the agency is more likely to give real consideration to alternative ideas.”
The complaint from the attorneys general meanwhile objected to the administration’s use of a policy that was intended to grant the Department of Education “specific waiver authority” to ensure relief for “members of the United States military” involved with the conflicts in Iraq and Afghanistan.
The Republican officials likewise pointed to the Supreme Court’s recent opinion in West Virginia v. EPA, which explained that federal agencies cannot assert “highly consequential power beyond what Congress could reasonably be understood to have granted.”
Critics of the student loan policy note that the measure would increase the national debt as the federal government waives the obligations: the overall cost of the loan cancellation could reach $400 billion, according to an estimate from the Congressional Budget Office. The policy may cause additional distortions as borrowers consider the likelihood of more bailouts, according to an analysis from economists at the University of Pennsylvania’s Wharton School, who noted that “students might eventually reorganize their financing toward additional borrowing.”
Opponents of student debt cancellation have also noted the disproportionate benefits that tend to accrue for more affluent borrowers. A report from the Brookings Institution observed that one-third of student debt is owed by the wealthiest quintile of households, while less than one-tenth is owed by the bottom quintile, likely because advanced degrees are often necessary for more lucrative professions.
Former Treasury Secretary and National Economic Council Director Lawrence Summers previously warned that the student debt cancellation plan would worsen overall cost pressures. “Every dollar spent on student loan relief is a dollar that could have gone to support those who don’t get the opportunity to go to college,” remarked Summers, a frequent skeptic of the Biden economic agenda despite his left-wing leanings. “Student loan debt relief is spending that raises demand and increases inflation. It consumes resources that could be better used helping those who did not, for whatever reason, have the chance to attend college. It will also tend to be inflationary by raising tuitions.”