The Washington Post Editorial Board slammed President Joe Biden (D) Wednesday afternoon for his plan to make U.S. taxpayers payoff thousands of dollars in student loans and Pell Grant recipients for those making less than $125,000 a year.
Nixing $10,000 of debt per borrower would cost $298 billion in 2022 and a total of $329 billion by 2031 if the policy is renewed each year, according to a nonpartisan analysis from the University of Pennsylvania’s Wharton School. Less than 32% of the funding would benefit Americans in the two lowest income quintiles, while 42% would benefit those earning more than $82,400 per year.
The piece, titled “Biden’s student loan announcement is a regressive, expensive mistake,” states that Biden’s decision was a “flashy gimmick” to ease “progressive pressure.”
The Washington Post states that the move to make taxpayers payoff the loans of some Americans and to further pause student loan payments was “ill-conceived and misdirected.”
The Editorial Board praised former President Donald Trump (R) for pausing student loan payments because the situation during the pandemic was extreme and action was warranted.
“The unemployment rate for people with bachelor’s degrees and higher is just 2 percent,” the Editorial Board wrote. “It’s hard to make the case that college graduates are still facing an unprecedented crisis.”
The Editorial Board wrote:
The loan-forgiveness decision is even worse. Widely canceling student loan debt is regressive. It takes money from the broader tax base, mostly made up of workers who did not go to college, to subsidize the education debt of people with valuable degrees. Though Mr. Biden’s plan includes an income cap, the threshold does not reflect need or earnings potential, meaning white-collar professionals with high future salaries stand to benefit. Student loans, moreover, are a poor proxy for household income: An analysis by policy researcher Jason D. Delisle found that, in 2016, students from high-income and low-income families were just as likely to take on debt for their first year in an undergraduate program — and students from high-income families borrowed the largest amounts.
Mr. Biden’s plan is also expensive — and likely inflationary. The Committee for a Responsible Federal Budget estimates that extending the loan pause to the end of the year would cost $20 billion, while forgiving $10,000 for households making less than $300,000 would cost $230 billion. Together, these policies would nullify nearly a decade’s worth of deficit reduction from the Inflation Reduction Act. Moreover, it is unclear that the 1965 Higher Education Act even grants the president the legal authority to take such a sweeping step, given that it was historically understood to permit only more targeted relief.
Ben Zeisloft contributed to this report.
Related: ‘No Way To Make Policy’: Democratic Congressman Rips Biden’s Plan For Student Debt Cancellation