The latest version of President <a href="https://www.dailywire.com/topic/joe-biden" target="_blank" rel="noopener">Joe Biden</a>’s student debt bailout, scaled back after its defeat in the <a href="https://www.dailywire.com/topic/supreme-court" target="_blank" rel="noopener">Supreme Court</a>, is again facing legal challenges.
Biden’s new plan involves forgiving the federal student loans of 800,000 borrowers worth roughly $39 billion. Two think tanks challenged it in a lawsuit filed on Friday, according to <a href="https://www.foxbusiness.com/personal-finance/think-tanks-file-suit-block-biden-administrations-plan-cancel-39b-student-loans" target="_blank" rel="noopener">Fox Business</a>.
New Civil Liberties Alliance filed the legal challenge last week in Michigan on behalf of the Mackinac Center for Public Policy and the Cato Institute. The lawsuit argues that the Department of Education is overstepping its authority with the forgiveness plan and asks the judge to rule it illegal.
The lawsuit is “a desperate attempt from right wing special interests to keep hundreds of thousands of borrowers in debt,” the Education Department said in a statement, according to the <a href="https://www.bostonherald.com/2023/08/06/groups-sue-to-block-bidens-second-try-on-student-loans/" target="_blank" rel="noopener">Associated Press</a>. “We are not going to back down or give an inch when it comes to defending working families.”
Biden’s original student debt forgiveness plan called for relieving up to $20,000 worth of federal debt for an estimated 43 million borrowers. The administration faced a couple of legal challenges, and it was ultimately <a href="https://www.scotusblog.com/2023/06/supreme-court-strikes-down-biden-student-loan-forgiveness-program/" target="_blank" rel="noopener">thwarted</a> after several states argued it would illegally relieve loans that they had agreed to service, costing the states up to tens of millions of dollars every year.
The Supreme Court ruled the plan unconstitutional on June 30, knocking down Biden’s attempt at fulfilling a campaign promise that had always appeared to be in doubt.
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Roughly two weeks later, on July 14, the administration rolled out its next, scaled-back version.
“For far too long, borrowers fell through the cracks of a broken system that failed to keep accurate track of their progress towards forgiveness,” Education Secretary Miguel Cardona said in a <a href="https://www.ed.gov/news/press-releases/biden-harris-administration-provide-804000-borrowers-39-billion-automatic-loan-forgiveness-result-fixes-income-driven-repayment-plans" target="_blank" rel="noopener">statement</a> at the time. “Today, the Biden-Harris Administration is taking another historic step to right these wrongs and announcing $39 billion in debt relief for another 804,000 borrowers. By fixing past administrative failures, we are ensuring everyone gets the forgiveness they deserve, just as we have done for public servants, students who were cheated by their colleges, and borrowers with permanent disabilities, including veterans. This Administration will not stop fighting to level the playing field in higher education.”

Miguel Cardona

Biden’s Latest Student Debt Bailout Plan Faces Legal Challenge From Think Tanks

Debt Forgiveness

Department of Education

Executive

Joe Biden

Michigan

Politics

Student Loan Cancellation

Student Loans

Washington D.C.

Welcome to Bidenomics, where the president&#8217;s plans to fix the student debt crisis could drive up both <a href="https://www.dailywire.com/topic/inflation" target="_blank" rel="noopener">inflation</a> and the overall cost of <a href="https://www.dailywire.com/topic/colleges" target="_blank" rel="noopener">college,</a> while doing nothing to fix the root of the problem, and <a href="https://www.dailywire.com/topic/national-debt" target="_blank" rel="noopener">cost</a> taxpayers as much as $1 trillion.
According to the Wharton School, the plan is going to cost a bit more than the marketed $300 billion price tag. Biden&#8217;s “debt cancellation alone will cost up to $519 billion, with about 75% of the benefit accruing to households making $88,000 or less,” Wharton <a href="https://budgetmodel.wharton.upenn.edu/issues/2022/8/26/biden-student-loan-forgiveness" target="_blank" rel="noopener">announced</a> in a new study.
“Loan forbearance will cost another $16 billion” and “the new income-driven repayment (IDR) program would cost another $70 billion, increasing the total plan cost to $605 billion” at a minimum based on Wharton&#8217;s model.
“Depending on future IDR program details to be released and potential behavioral (i.e., &#8216;non-static&#8217;) changes, total plan costs could exceed $1 trillion,” the school warned.
For his part, Biden doesn&#8217;t believe that massive government spending contributes to inflation. In the spring, the president <a href="https://www.dailywire.com/news/im-sick-of-this-stuff-biden-complains-that-the-american-people-believe-increased-government-spending-causes-inflation" target="_blank" rel="noopener">barked</a> that he was “sick” of criticism against his administration&#8217;s spending plans.
“We have to talk about it because the American people think the reason for inflation is government spending more money. It’s simply not true,” he claimed. Even the Associated Press <a href="https://apnews.com/article/russia-ukraine-biden-covid-health-business-772e1eb45fb5981f3a2b6f2a4b0d201f" target="_blank" rel="noopener">dinged</a> Biden for that false statement, explaining to the president that high spending does indeed contribute to rising prices.
Yet even before Wharton&#8217;s astronomical pricetag was released, folks like former President Barack Obama&#8217;s top economic advisor Larry Summers were blasting Biden&#8217;s bailout. Summers argued this week that the plan will add to inflation woes.
“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,” Summers <a href="https://www.dailywire.com/news/raises-demand-and-increases-inflation-obamas-top-economist-shreds-biden-plan-for-student-loan-cancellation" target="_blank" rel="noopener">explained</a>.
“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,” he added. “It will also tend to be inflationary by raising tuitions.”
Richard Vedder, a senior fellow at the Independent Institute and an economics professor, also recently <a href="https://www.foxbusiness.com/politics/student-loan-handout-illegal-inflationary-immoral-inequitable">explained</a> for Fox News that the debt cancellation could lead to students taking out more student loans while colleges hike up prices even more.
“Forgiving student loans increases incentives for colleges to raise tuition and fees more aggressively,” Vedder argued. “Students will be emboldened to borrow more, thinking &#8216;I will not ever have to pay the loans back.&#8217;”
Vedder noted that the empirical data show that “most new federal student loan money ends up being absorbed by higher tuition fees; universities and their staffs benefit much more than students.”
Furthermore, Biden&#8217;s debt plan does nothing to stop the actual problem — government-backed loans giving cover for colleges to raise prices. The students taking out loans today will find themselves in a similar situation 10 years down the road, albeit with different payback options.
In short, the preliminary data suggests Biden&#8217;s debt amnesty will do zilch to fix the crisis or help the economy. In the words of attorney Mark Meuser, “<a href="https://www.dailywire.com/news/like-a-band-aid-on-gangrene-why-forgiving-student-loans-is-unconstitutional">It&#8217;s like putting a bandaid on gangrene</a>.” That&#8217;s Bidenomics in action, folks.
The views expressed in this piece are the author’s own and do not necessarily represent those of The Daily Wire.

Bidenomics: Student Debt Amnesty Could Cost $1 Trillion

Bidenomics: Student Loan Amnesty Could Cost $1 Trillion

Biden

College

Economics

The Biden administration <a href="https://www.dailywire.com/news/bidens-plan-to-cancel-10000-in-student-debt-would-not-be-enough-for-black-borrowers-naacp-chief-says">is poised</a> to enact student college debt forgiveness of upwards of $10,000 per individual and conservatives are rightly concerned about the American taxpayer ultimately footing the bill.
The students who took out loans should be on the hook for paying them back, <a href="https://www.newsweek.com/student-loan-debt-your-own-fault-conservatives-blast-biden-forgiveness-proposals-1549279">the argument goes</a>. At the very least, the government should stop providing federally guaranteed loans that allow universities to drive up the cost in the first place, a conservative might say.
Yet there is another idea about how to forgive student debt that would not necessarily burden taxpayers or excuse colleges from their own role in the skyrocketing cost of higher education. Some on the right believe that the federal government should tax, or outright seize, university endowments to enact massive forgiveness of college loans.
As <a href="https://www.investopedia.com/ask/answers/how-do-university-endowments-work/">explained</a> by Investopedia, “University endowments are comprised of money or other financial assets that are donated to academic institutions. Charitable donations are the primary source of funds for endowments. Endowment funds support the teaching, research, and public service missions of colleges and universities.” These endowments are largely not taxed because they are supposed to be used to advance their college’s mission of providing a quality product. 
While the idea might sound like populist punditry contrived out of misplaced anger, one of the first progenitors of the idea was a man once described as President Ronald Reagan&#8217;s favorite economic thinker and author: George Gilder. 
Gilder is credited as bolstering Reagan’s belief in the power of supply-side economics with his best-selling book “Wealth &amp; Poverty.” The 40th president believed in Gilder’s creed to capitalism so much so that he even <a href="https://www.nytimes.com/1981/04/26/business/george-gilder-s-hymn-to-getting-rich.html">handed</a> out copies of &#8220;Wealth &amp; Poverty&#8221; around to his friends and cabinet members for their enlightenment. 
Since then, Gilder has gone on to predict things such as the iPhone and other technological advancements, all while crafting his own theory about capitalism as an information system and fighting against the scourge of socialism. With a resume like that, his 2018 idea to tax universities’ endowments to cancel student debt should be given some more thought by advocates of limited government economics.
The premise for Gilder’s idea is that, for decades now, universities have perpetuated massive fraud on both the college student and taxpayer. Despite raising the cost of college tuition, there is little evidence that the quality of American higher education has improved at all, he believes.
At the same time, colleges like <a href="https://www.harvard.edu/about/endowment/">Havard</a> and <a href="https://investments.yale.edu/">Yale</a> have amassed $53 and $42 billion endowments respectively, while pocketing money from students.
In 2018, Gilder <a href="https://www.wsj.com/articles/sage-against-the-machine-1535747443">told</a> The Wall Street Journal’s Tunku Varadarajan that “human beings have a propensity to believe in leftism”—in the idea that government can “answer all of their problems, guarantee their future, and relieve them of the challenges of life&#8221; which allowed this market manipulation to occur in the first place.Gilder explained that the idea of a “‘completely providential government’ arose in America, and a ‘whole generation of young people were given college loans in a fabulous national mistake, in which the Republicans participated.’” 
Gilder added that the federally-backed Guaranteed Student Loan Program, which <a href="https://lendedu.com/blog/history-of-student-loans">launched</a> under the Higher Education Act of 1965, was used by college administrators to “increase perks and tenured luxuries and ideological distractions”—all of which led to the “diversity campaigns and CO2 panics” that we see today across college campuses paid for by exorbitantly high tuition rates. 
Indeed, in 2019, CNBC <a href="https://www.cnbc.com/2019/05/13/costs-have-jumped-55-percent-in-a-decade-at-public-colleges.html">reported</a> that &#8220;From 1964 to 2019, the cost of tuition jumped just under 3,000%. Meanwhile, the cost of a four-year public school soared to just over 3,800%, from a mere $261 annually.&#8221; 
Gider added that this “vast blunder,” must be undone through massive forgiveness by extracting “the money from all the college endowments and funds that were used to just create useless departments and political campaigns.” 
There is evidence behind Gilder’s claim. For example, in 2018, a team of educators researched the impact of Chief Diversity Officers on institutions and <a href="https://www.nber.org/papers/w24969">found</a> that, despite their job description and despite being paid hundreds of thousands of dollars, they largely did not diversify college education. 
The <a href="https://www.russellreynolds.com/en/insights/reports-surveys/the-emergence-of-the-chief-diversity-officer-role-in-higher-education#:~:text=Evolution%20of%20the%20chief%20diversity,the%20last%20five%20years%20alone">CDO job</a> was popularized in the early 2000s, and by 2016, 65 percent of colleges in America had that position on staff.  But, <a href="https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3244282">researchers</a> were &#8220;unable to find significant statistical evidence that preexisting growth in diversity for underrepresented racial/ethnic minority groups is affected by the hiring of an executive-level diversity officer for new tenure and non-tenure track hires, faculty hired with tenure, or for university administrators.&#8221; 
That means that students are taking out loans in part to fund lucrative positions for which there is no evidence they actually benefit the college as they are intended to do so. 
Other researchers, like Roger Geiger of Pennsylvania State University and Donald Heller of Michigan State University, have also found that &#8220;since 1990, in both public and private colleges, expenditures on instruction have risen more slowly than in any other category of spending, even as student numbers have risen. Universities are, however, spending plenty more on administration and support services,&#8221; <a href="https://www.economist.com/united-states/2012/12/01/not-what-it-used-to-be">according</a> to The Economist. 
The Economist also <a href="https://www.economist.com/united-states/2012/12/01/not-what-it-used-to-be">noted</a>, that from 1983 to 2012, &#8220;the cost of university per student has risen by almost five times the rate of inflation,&#8221; despite no evidence that the quality of education is improving to justify those costs. 
Ultimately, Gilder argues that the college education and government loan complex has destroyed “the entrepreneurial optimism of a whole generation of young people, to drive them toward socialism, which they now tend to favor, and to even dissuade them from marriage.”
Furthermore, he adds that the student debt incurred by young adults “cripples them for the future,” and as Varadajran describes, Gilder believes that any educational benefit from college is “nullified by the economic burden inflicted on them, which ‘leaves these kids impotent in the world.’”
Gilder is not alone in this thinking. In 2020, William Chamberlain, attorney and current <a href="https://www.washingtonpost.com/opinions/2019/03/01/breitbart-alum-resuscitate-human-events/">owner and publisher</a> of Reagan’s favorite magazine, Human Events, <a href="https://humanevents.com/2020/03/30/seize-the-endowments/">delivered</a> a “clarion call” to “seize the endowments” of colleges to forgive student loans. 
At the time, Chamberlain wrote, “College debt is uniquely odious; it’s the only debt that’s non-dischargeable, and it’s offered to children. Today, 44.2 million Americans carry almost $1.5 trillion in student loan debt. Inflated tuition costs, of course, is largely to blame; the cost of college for millennials is significantly different from that of their parents.”
Chamberlain, like Gilder, believes that we should recenter the conversation and view the outstanding debt as “fraudulent.” He noted that some progressives like Senators Elizabeth Warren (D-MA) and Bernie Sanders (I-VT) want to forgive student debt outright, and offer free college tuition. But he argues that that ignores why the debt should be forgiven in the first place. 
“Students drowning in student loan debt are not freeloaders looking for a handout,” he added. “They are, instead, the victims of fraud, a fraud jointly perpetrated by their alma mater and the federal government.”
“Conservatives oppose fraud,” Chamberlain asserted. “Part of a free enterprise system is holding those who victimize innocent consumers accountable in the courts, making them pay restitution to their victims.” 
In a statement given to The Daily Wire, Chamberlain further explained, “The basic idea is that if college debt needs to be forgiven that means it’s odious. If college debt is odious the universities should pay for its forgiveness.”
Indeed, it would appear that the federal government agrees, at least in part, with that assessment. 
On Wednesday, June 1, the U.S. Department of Education <a href="https://www.ed.gov/news/press-releases/education-department-approves-58-billion-group-discharge-cancel-all-remaining-loans-560000-borrowers-who-attended-corinthian-colleges">announced</a> that it would be discharging $5.8 billion worth of loans for 560,000 borrowers who attended Corinthian Colleges.
Corinthian had a series of campuses across the U.S. and operated from 1995 to 2016. It was shut down because they “engaged in widespread and pervasive misrepresentations” related to job placement after college as well as other false claims about the benefits they offered their alumni. 
&#8220;As of today, every student deceived, defrauded, and driven into debt by Corinthian Colleges can rest assured that the Biden-Harris administration has their back and will discharge their federal student loans,&#8221; <a href="https://www.ed.gov/news/press-releases/education-department-approves-58-billion-group-discharge-cancel-all-remaining-loans-560000-borrowers-who-attended-corinthian-colleges">said</a> U.S. Secretary of Education Miguel Cardona. &#8220;For far too long, Corinthian engaged in the wholesale financial exploitation of students, misleading them into taking on more and more debt to pay for promises they would never keep.” 
Corinthian will not be forced to pay back those loans, which means it will ultimately be foisted upon the taxpayer in one way or another. 
But however, using Cardona’s own reasoning for the forgiveness, a conservative could make the case that student loans should be forgiven across the board because universities as a whole have been advancing pet causes, such as  diversity initiatives, that have not improved education while banking massive endowments. 
Those endowments were only made possible by tax-payer-funded loans in the first place. Therefore, the government should use those endowments to wipe out debt and relieve an entire generation from fraud. 
Of course, simply seizing the endowments without cutting off the spigot that de facto funds colleges — the federal government — will not solve the problem in the long run. 
Colleges are incentivized to expand their student population because they understand more students have access to government-backed loans. The colleges aren&#8217;t on the hook for paying back that money. This, in turn, arguably drives down the value of a degree and decreases the quality of education by allowing more pupils into the university, thus watering down the academic rigor of its student body. The only solution to improving education is to raise the standards of entry and admit fewer students, <a href="http://aei.pitt.edu/62197/1/WD_405_Growth_of_higher_education_decline_in_quality_of_degrees.pdf">according to researchers</a> from the Centre for European Policy Studies.
Therefore, the federal government should wash its hands of student loans altogether, making it impossible for colleges to continue raising prices in the first place while admitting more students.
The federal government should end federally-backed loans, thus forcing colleges to lower costs and cut bloated administrative positions which empirically do not improve students’ curriculum.
At the very least, conservatives can entertain the idea that students and taxpayers alike have been defrauded by both big education and big government. In turn, colleges should play a financial role in forgiving student debt if any forgiveness is to happen at all. 

The opinions expressed in this piece are the author&#8217;s own and do not necessarily represent those of The Daily Wire.

Meads – Should We Seize College Endowments To Solve The Debt Solution_

Should We Seize College Endowments To Solve The Debt Problem? 

Readers Pass

Universities

As President Joe Biden reportedly nears a plan to cancel $10,000 in student loans per borrower, National Association for the Advancement of Colored People (NAACP) President Derrick Johnson argued Friday that the amount would not be enough — particularly for black borrowers.
After months of pressure from progressive Democrats, the White House is nearing a plan to scrap $10,000 per borrower earning up to $150,000 per year, according to a report from <a href="https://www.washingtonpost.com/us-policy/2022/05/27/biden-student-debt-borrower/">The Washington Post</a>. Johnson <a href="https://twitter.com/DerrickNAACP/status/1530205000571437058">argued</a> that such a solution would be “pouring a bucket of ice water on a forest fire.”
“Black Americans are the only people who have student debt higher than their median annual income,” he said. “$10,000 in cancelation would not place their student debt lower than their annual income.”
Johnson also pointed toward wealth disparities between black and white households.
“Today, the average white family has roughly 10 times the amount of wealth as the average Black family, while white college graduates have over seven times more wealth than Black college graduates,” he noted. “Black borrowers typically owe 50% more in student debt upon graduation than their white peers. Four years after graduation, this gap increases to 100%.”
Other data suggest that student loan forgiveness disproportionately <a href="https://www.dailywire.com/news/six-groups-who-lose-if-joe-biden-forgives-college-loans">benefits wealthy Americans</a>. The highest income 40% of households hold 60% of student loan debt, according to a study from the Brookings Institution. Most of the people benefiting from debt cancellation make above $74,000.
Yet Johnson is not the only prominent progressive urging President Biden to take more aggressive unilateral action on student debt. Senate Majority Leader Chuck Schumer (D-NY), Sen. Elizabeth Warren (D-MA), and Rep. Alexandria Ocasio-Cortez (D-NY) have repeatedly pressed the commander-in-chief to cancel student loan debt of up to <a href="https://www.dailywire.com/news/aoc-spars-with-biden-over-canceling-student-debt">$50,000 per borrower</a>.
“It’s teenagers signing up for what is often hundreds of thousands of dollars of debt. We just do that. Our government allows that,” Ocasio-Cortez said on the House floor last year. “We give 17-year-olds the ability to sign on and sign up for $100,000 worth of debt and we think that’s responsible policy.”
Schumer has argued that “all President Biden has to do is flick his pen” in order to erase $50,000 per borrower. However, House Speaker Nancy Pelosi (D-CA) <a href="https://www.dailywire.com/news/this-cpac-footage-is-nuts-progressives-blast-pelosi-for-saying-student-debt-forgiveness-is-a-bad-idea">questioned</a> the overall premise that student loan forgiveness is a beneficial policy.
“Suppose,” she said in response to Schumer’s argument, “your child at this time does not want to go to college, but you’re paying taxes to forgive someone else’s obligation. You may not be happy about that.”
Meanwhile, many conservatives argue that forgiving student loans worsens the problem that underlies the crisis altogether — excessive government intervention.
In a recent opinion piece, The Daily Wire’s Zach Jewell noted that taxpayers who pay for college after carefully saving their money will be <a href="https://www.dailywire.com/news/i-paid-my-way-through-college-forcing-me-to-pay-for-someone-elses-is-unjust">the ones who bear the burden</a> of canceled student debt.
“If Biden could wave a magic wand at the request of leftists in Congress and suddenly make student loans disappear, this would be great news,” Jewell wrote. “But since we don’t prance around in the magical fairyland some Democrats want us to believe in, no one can ‘forgive’ student loans for some without burdening others.”
“Those taking the hit for student debt cancellation would be the taxpayers like me who paid their way through college or who responsibly paid back their loans and like others who never went to college and never needed student loans.”

US-POLITICS-BIDEN

Biden’s Plan To Cancel $10,000 In Student Debt Would Not Be Enough For Black Borrowers, NAACP Chief Says

NAACP President Says Biden Forgiving $10,000 Of Student Loans Per Borrower Is Not Enough

Biden Administration

NAACP

President Joe Biden said Thursday that he is considering canceling some student loan debt, but much less than progressive Democrats have urged him to.
Speaking to reporters after his prepared <a href="https://www.youtube.com/watch?v=WDmvpratIuo">remarks</a> Thursday on his request for billions more in aid to Ukraine, Biden was asked about recent comments made by Senate Majority Leader <a href="https://www.dailywire.com/news/schumer-white-house-seems-more-open-to-student-loan-forgiveness-than-ever-before">Chuck Schumer (D-NY)</a>, which suggested that Biden was &#8220;more open&#8221; to canceling student debt &#8220;than ever before.&#8221;
&#8220;You mean my spokesman said that?&#8221; Biden asked, smiling at the reporter, who repeated that it was Schumer who made the comments.
Biden answered the reporter first by defending his move to cancel the debts of people working in public service through the Public Service Loan Forgiveness program. “Number one, the first thing we did was reform the system that was in place that didn&#8217;t work for anybody, that allowed people to write off debt if they engaged in public service,&#8221; Biden said. &#8220;We have almost a million, 785 — don&#8217;t hold me to the exact number, I&#8217;ll get the number, 700-some thousand have had debt forgiven, their whole debt forgiven because of their work, working in — [either as] teachers or other means by which they qualify, and we continue to make that easier.&#8221;
“Secondly, I am considering dealing with some debt reduction,” Biden continued. “I am not considering $50,000 debt reduction, but I’m in the process of taking a hard look at whether or not there will be additional debt forgiveness, and I’ll have an answer on that in the next couple of weeks.”
Schumer said at a virtual summit by the Student Debt Crisis Center on April 13 that, based on recent conversations, he thought the White House was more open to cancelling student loan debt. “We’re working on it,” Schumer said. “We’re making progress, folks. We are making progress. The White House seems more open to it than ever before.”
“We want our young people to realize that they can have a good future. One of the best, very best, top-of-the-list ways to do it is by canceling student debt, by getting rid of the $50,000, even going higher after that,” he added.
Biden&#8217;s remarks also came after CBS News <a href="https://twitter.com/edokeefe/status/1519017885267636224">initially reported</a> Wednesday that Biden told the Congressional Hispanic Caucus that he was &#8220;looking at forgiving most federal student loan debt.&#8221; CBS News later <a href="https://www.cbsnews.com/news/biden-options-forgiving-student-loan-debt/">clarified</a> that Biden did not give a specific amount of debt he would forgive, nor did he say he would wipe out all student loan debt. Biden did, however, indicate that he was going to make a move to cancel some debt. Democratic California Representative Tony Cardenas told CBS that during the meeting, he reiterated that the Caucus supported Biden canceling up to $10,000 of student debt through executive action if Congress could not pass legislation doing so. In response, Biden reportedly told Cardenas, &#8220;You’re going to like what I do on that, I&#8217;m looking to do something on that and I think you&#8217;re going to like what I do.&#8221;
In the meantime, Biden <a href="https://www.dailywire.com/news/biden-extends-pause-on-federal-student-loan-payments">extended</a> the student loan repayment moratorium earlier this month through August 31. The freeze was expected to end on May 1. Progressive Democrats are still not satisfied. A group of House Democrats sent a <a href="https://www.dailywire.com/news/house-democrats-push-biden-to-extend-student-loan-freeze-through-the-end-of-the-year">letter</a> to Biden in March asking Biden to extend the pause through the end of the year, and Massachusetts Democratic Senator <a href="https://www.dailywire.com/news/not-everything-has-to-go-through-congress-elizabeth-warren-wants-biden-to-be-more-authoritarian-axe-student-debt">Elizabeth Warren</a> insisted Sunday that Biden has the authority to forgive all of the more than $1.6 trillion in student loans held by borrowers.

Biden: ‘I Am Considering Dealing With Some Debt Reduction,’ But Not $50,000

Biden ‘Considering’ Some Student ‘Debt Reduction,’ But Not $50,000

Charles Schumer

Democratic Party

If President Joe Biden actually forgives massive student loan debt for thousands of college graduates, it is obvious that the big winners will be those saddled by college debt, but here is a list of just some of the groups who will be the biggest losers if college debt forgiveness comes to fruition.
Taxpayers Who Eat $1.6 Trillion:
The Federal Reserve Bank of St. Louis announced this April that college loan borrowers <a href="https://www.statista.com/chart/24477/outstanding-value-of-us-student-loans/#:~:text=According%20to%20the%20Federal%20Reserve,by%20the%20end%20of%202021.">owe a collective $1.75 trillion</a> in debt to lending institutions. Some of that is private loans, but <a href="https://www.marketplace.org/2022/03/15/the-jurys-still-out-on-that-1-6-trillion-in-student-loan-debt/">$1.6 trillion </a>of it is in federal loans. If Biden &#8220;forgives,&#8221; that debt, the debt does not just disappear. It will be transferred to the American taxpayer. Your hard-earned money — assuming you pay a federal income tax — will be used to pay that debt down.
People Who Didn&#8217;t Go To College But Whose Taxes Will Go Toward The Plan
According to the informational website <a href="https://www.savingforcollege.com/article/who-owes-the-most-student-loan-debt#:~:text=The%20highest%2Dincome%2040%25%20of,only%2010%25%20of%20the%20payments.">savingforcollege.com</a>, &#8220;the highest-income 40% of households (those with incomes above $74,000) owe almost 60% of student loan debt.&#8221;
Many Americans have opted to not attend college because they could not afford the high cost. Thousands chose instead to go trade schools and learn valuable skills such as plumbing or welding.
Consider that the <a href="https://money.usnews.com/careers/best-jobs/plumber/salary">average plumber made $56,330</a> in 2020, less than what the top 60% of student debt holders made. If student debt is wiped out for those millions of individuals, the hardworking blue-collar employee will see his or her taxes go toward paying off the debt of a liberal arts degree who majored in Gender Studies.
Americans Who Just Paid Off All Or Portions Of Their Loans
Of course, there are those who went to college, worked their derriere off after they graduated, were financially responsible, and paid off their loans. Maybe other Americans used inheritance money or other means to pay off their debt.
Regardless of how they did it, they kept up their end of the bargain by working toward paying back what they owed completely, and most likely will not see a penny from Biden&#8217;s loan forgiveness plan. The axiom that &#8220;no good deed goes unpunished&#8221; remains true, apparently.
People Who Enroll And Borrow Going Forward
The Biden administration has a penchant for changing policy without a follow-up plan in place to limit any fallout from changing course.
Consider how badly the Afghanistan debacle was handled and that the Democrats are planning on ending Title 42 <a href="https://www.npr.org/2022/04/20/1093529387/as-biden-plans-to-lift-title-42-democrats-want-details-on-how-hell-address-influ">without a clear plan in place</a>, which experts believe will lead to a &#8220;<a href="https://www.dailywire.com/news/migrant-tsunami-will-worsen-due-to-title-42-rollback-former-trump-and-biden-border-patrol-chief-says">tsunami</a>&#8221; of illegal aliens at our border.
Now, think of students who are considering enrolling and need to take out student loans in the future. Based on the current student-loan structure, and a lack of something concrete to replace that system, there isn’t any real evidence that the student debt problem won’t repeat itself again — even if current loans are forgiven.
Thus, students who take out loans in the future will likely still be harmed by massive debt. Only those who have already taken out loans will benefit from Biden’s potential forgiveness of debt.
Colleges That Don&#8217;t Participate In Federal Loan Programs
There are some institutions that do not participate in the federal loan program. These are schools like Hillsdale College in Michigan and Christendom College in Virginia that want to be free from the shackles of big government.
Christendom&#8217;s <a href="https://giving.christendom.edu/the-freedom-fund/why-christendom-college-rejects-federal-funding/">website explains</a> that the college does not accept federal loans so that &#8220;it is free to teach the Catholic Faith without government interference.&#8221;
If students need monetary assistance other than financial aid or scholarships, they must apply for loans from private lenders. Previous plans and proposed policies for loan forgiveness do not include private loans, meaning that private loans will not be dismissed because they were not backed by the federal government.
Undoubtedly, graduates of non-federal loan program colleges will wonder where their relief is going to come from.
It is reasonable to assume that future students considering taking out private loans to attend places like Hillsdale or elsewhere — while knowing a federal loan could possibly be forgiven down the line — might opt for the federally-backed institutions. Perhaps that is what Leftists want to happen.
Recently Naturalized Citizens
You can almost hear bachelor&#8217;s degree holders from sea to shining sea saying to newly naturalized citizens: &#8220;Welcome to America, now pay off my debt.&#8221; It&#8217;s not quite &#8220;The New Colossus&#8221; poem by Emma Lazarus, but hey, welcome to Biden&#8217;s America anyway. Now, pay your fair share.&#8221;
Why would it make sense for an immigrant who just became a tax-paying citizen to pay off loans taken out by somebody from 20 years ago?
The Buck Stops Where?
President Harry Truman used to have a sign on his desk that read, &#8220;The Buck Stops Here.&#8221; It represented the idea that he alone was responsible for actions taken by the federal government. Under that logic, Biden would also be responsible for any action taken by the feds during his presidency — good or bad.
So, is Biden considering forgiving student debt so that he can take credit and earn a political boost for the Democratic Party right before the 2022 elections? Polling <a href="https://www.politico.com/newsletters/playbook-pm/2022/04/13/voters-want-some-student-loan-forgiveness-00024989">indicates</a> that the Democratic base desperately wants Biden to use his executive authority to forgive student loans.
According to some elected officials, the president was recently &#8220;incredibly positive&#8221; about <a href="https://www.forbes.com/sites/adamminsky/2022/04/26/biden-reportedly-considering-broad-student-loan-cancellation/?sh=185bf63f4e97">broad cancellation</a> in the future. If true, that might occur before the midterms in hopes of getting out the progressive vote.
Of course, Biden has never explained why it is the responsibility of the six aforementioned groups to pay off that debt.
&#8220;The buck,&#8221; many people believe, stops with the federal government for getting involved in college loans in the first place alongside those who actually borrowed the money  — not the American taxpayer.
The views expressed in this piece are the author&#8217;s own and do not necessarily represent those of The Daily Wire.

Joe Biden college graduation

Six Groups Who Lose If Joe Biden Forgives College Loans

Students

The Biden administration is officially extending the student loan repayment freeze for another 90 days, after pressure from progressive Democrats in Congress, as well as civil rights groups.
&#8220;[O]n my very first day as President, I directed the Department of Education to pause federal student loan repayments through September. In August, my Administration once again extended the pause, through January 31, 2022,&#8221; said President Joe Biden in a White House <a href="https://www.whitehouse.gov/briefing-room/statements-releases/2021/12/22/statement-by-president-joe-biden-extending-the-pause-on-student-loan-repayment-an-additional-90-days/">press release</a> Wednesday announcing the move. &#8220;That pause has given 41 million Americans badly-needed breathing room during the economic upheaval caused by the global COVID-19 pandemic.&#8221;
&#8220;[W]e know that millions of student loan borrowers are still coping with the impacts of the pandemic and need some more time before resuming payments. This is an issue Vice President Harris has been closely focused on, and one we both care deeply about,&#8221; Biden continued.
&#8220;Given these considerations, today my Administration is extending the pause on federal student loan repayments for an additional 90 days — through May 1, 2022 — as we manage the ongoing pandemic and further strengthen our economic recovery. Meanwhile, the Department of Education will continue working with borrowers to ensure they have the support they need to transition smoothly back into repayment and advance economic stability for their own households and for our nation.&#8221;
Biden ended his statement by encouraging student loan borrowers to take advantage of Department of Education resources to help them make payments once the freeze is ended, look at lowering their payment amounts through income-based plans, consider the <a href="https://studentaid.gov/sites/default/files/public-service-application-for-forgiveness.pdf">Public Service Loan Forgiveness</a> program, and of course, get vaccinated and boosted.
The Daily Wire reported earlier in the day Wednesday that the Biden administration was <a href="https://www.dailywire.com/news/biden-administration-could-reverse-course-extend-student-loan-repayment-pause">considering extending the repayment freeze</a> because of concerns about the Omicron variant. The Daily Wire reported:
<blockquote>In March 2020, the CARES Act temporarily paused student debt repayments and pegged the federal student loan interest rate at 0% — a policy extended by both President Donald Trump and President Joe Biden. Last week, however, White House Press Secretary Jen Psaki confirmed that “a smooth transition back into repayment is a high priority for the administration” — indicating that an extension of the pause beyond January 2022 could not be expected.
Nevertheless, a Tuesday statement from a Department of Education spokesperson indicated that the White House may once again delay student loan repayments.
“Since day one of the Biden Administration, we’ve been hard at work delivering meaningful relief to student loan borrowers,” the spokesperson told CNBC. “That started with an extension of the pause on federal student loan repayment until Jan. 31, 2022. Later this week, we will be announcing whether to extend the pause further.”
Any potential move toward student loan forgiveness would align with recent pressure from progressives, who have been urging Biden to suspend repayments — and cancel student debt altogether.</blockquote>
A number of <a href="https://www.dailywire.com/news/teachers-unions-aclu-want-biden-to-extend-student-loan-repayment-pause-cancel-student-debt">progressive advocacy groups</a>, including the American Civil Liberties Union, the NAACP, the American Federation of Teachers, and the American Association of University Professors, petitioned Biden to continue the pause or cancel student debt in a letter sent to the White House earlier this month, citing his campaign promise to cancel student debt and reform the student loan borrowing system. Progressive Democrats like Sen. <a href="https://twitter.com/SenWarren/status/1473377989320753163?s=20">Elizabeth Warren</a> (D-MA) and Rep. <a href="https://twitter.com/AOC/status/1472934072133562369?s=20">Alexandria Ocasio-Cortez</a> (D-NY), even Senate Majority Leader <a href="https://twitter.com/SenSchumer/status/1470845544474058753?s=20">Chuck Schumer</a> (D-NY), also pressured Biden to continue the freeze or cancel student debt.

Finances

Biden Officially Extends Student Loan Repayment Freeze Until May 1

Education

Rep. Ayanna Pressley (D-MA) argued that paying back one’s student debt constitutes “policy violence” — an argument promptly refuted by conservatives on social media.
On Friday, the progressive lawmaker posted a lengthy Twitter thread about student loan debt, arguing that the phenomenon is a “racial,” “gender,” and “economic justice” issue.
<blockquote class="twitter-tweet">
Today, over 43 million people in the U.S. are crushed under more than $1.7 trillion in student loan debt.
This fall, the A-Team led our first ever deep canvassing efforts w/our neighbors across the <a href="https://twitter.com/hashtag/MA7?src=hash&amp;ref_src=twsrc%5Etfw">#MA7</a> to hear how this crisis impacts our communities. This is what we learned🧵
— Ayanna Pressley (@AyannaPressley) <a href="https://twitter.com/AyannaPressley/status/1471857512236396553?ref_src=twsrc%5Etfw">December 17, 2021</a></blockquote>
“Today, over 43 million people in the U.S. are crushed under more than $1.7 trillion in student loan debt,” Pressley noted. She thanked activists for “deep canvassing” her district — a process in which they “engaged voters across the district in longer, one-on-one conversations about student debt cancellation, discussed how canceling student debt would impact their lives, and introduced new perspectives by sharing stories &amp; lived experiences.”
Pressley offered three such interactions, concluding: “And so many others whose lived experiences continue to affirm what we know to be true: That the student debt crisis is multiracial &amp; multigenerational. That it is a racial, gender &amp; economic justice issue.”
After calling on President Biden to unilaterally cancel loans, Pressley declared that “student debt is policy violence.” However, conservatives immediately noticed the hypocrisy behind Pressley’s argument.
<blockquote class="twitter-tweet">
Let’s make it plain: student debt is policy violence.
We’ll keep fighting to relieve families across the country, to make sure our policies &amp; budgets reflect their lived experiences &amp; that we build this grassroots movement to <a href="https://twitter.com/hashtag/CancelStudentDebt?src=hash&amp;ref_src=twsrc%5Etfw">#CancelStudentDebt</a> together🧵
— Ayanna Pressley (@AyannaPressley) <a href="https://twitter.com/AyannaPressley/status/1471858295329771528?ref_src=twsrc%5Etfw">December 17, 2021</a></blockquote>
“Paying your own debts that you entered a contractual agreement to repay is VIOLENCE. But forcing blue-collar workers to repay your debts while you engage in online social justice activism is EQUITY. Am I understanding this correctly?” <a href="https://twitter.com/ChristinaPushaw/status/1471946921577177094">tweeted</a> Christina Pushaw, the press secretary for Gov. Ron DeSantis (R-FL). “Student debt is violence, but throwing Molotov cocktails into police cars is social justice,” she <a href="https://twitter.com/ChristinaPushaw/status/1471944826719457285">noted</a> sarcastically in another tweet.
“Let&#8217;s make it plain: you&#8217;re a dirty Communist,” <a href="https://twitter.com/ConceptualJames/status/1471938022803480581">said</a> New Discourses founder James Lindsay. “We&#8217;ll keep fighting to remove you from any power and influence in our society, and you&#8217;ll thank us if you don&#8217;t end up is prison for the rest of your life.”
“Democrats always get the human motivation part wrong. Every time,” <a href="https://twitter.com/ScottAdamsSays/status/1471946417388228609'">said</a> cartoonist Scott Adams.
“Abusing terms like ‘violence’ doesn&#8217;t persuade people,” <a href="https://twitter.com/saletan/status/1472061496423235586">acknowledged</a> Will Saletan, a correspondent with progressive outlet Slate. “It just makes them discount the rest of your message.”
“Abortion is violence,” <a href="https://twitter.com/TomFitton/status/1472006526160228364">countered</a> Judicial Watch president Tom Fitton.
Pressley’s remarks follow other Democratic lawmakers’ <a href="https://www.dailywire.com/news/pay-your-own-darn-bills-aoc-who-makes-174000-per-year-blasted-for-complaining-about-17k-in-student-loans">complaints</a> about their own outstanding student loan balances.
In a speech on the House floor, Rep. Alexandria Ocasio-Cortez (D-NY) called it “ridiculous” that she needs to pay $17,000 in student loans — although her annual salary as a member of Congress is $174,000.
“I’m 32 years old now,” Ocasio-Cortez said. “I have over $17,000 in student loan debt, and I didn’t go to graduate school because I knew that getting another degree would drown me in debt that I would never be able to surpass. This is unacceptable.”
Meanwhile, Rep. Rashida Tlaib (D-MI) said on the House floor that she is likewise struggling to repay her obligations: “I worked full time, Monday through Friday, and took weekend classes to get my law degree. And still, close to $200,000 in debt. And I still owe over $70,000 and most of it was interest.”

Marine Corps

Conservatives Blast Squad Member Ayanna Pressley For Calling Student Debt ‘Policy Violence’

Ayanna Pressley

During a floor speech on Thursday, Rep. Alexandria Ocasio-Cortez (D-NY) denounced the Biden administration’s refusal to “cancel” student debt.
Since President Joe Biden took office, progressive lawmakers have been pressuring him into forgiving federal student loans. Senate Majority Leader Chuck Schumer (D-NY) — joined by Sen. Elizabeth Warren (D-MA) and Rep. Ayanna Pressley (D-MA) — <a href="https://www.dailywire.com/news/citing-racial-inequality-schumer-asks-biden-to-flick-his-pen-and-cancel-50000-in-student-debt">said</a> in July that “all President Biden has to do is flick his pen” and cancel $50,000 of obligations for each borrower.
Meanwhile, other Democrats — including House Speaker Nancy Pelosi (D-CA) — <a href="https://www.dailywire.com/news/this-cpac-footage-is-nuts-progressives-blast-pelosi-for-saying-student-debt-forgiveness-is-a-bad-idea">question</a> the premise that student loan forgiveness is a beneficial policy.
“Suppose,” she said in response to Schumer&#8217;s argument, “your child at this time does not want to go to college, but you’re paying taxes to forgive someone else’s obligation. You may not be happy about that.”
As recorded by <a href="https://www.foxbusiness.com/politics/aoc-biden-cancel-student-loan-debt-ridiculous">Fox Business</a>, Ocasio-Cortez implored Biden to reconsider student debt forgiveness — which, according to the White House, requires an act of Congress.
&#8220;It’s teenagers signing up for what is often hundreds of thousands of dollars of debt. We just do that. Our government allows that,&#8221; Ocasio-Cortez argued. &#8220;We give 17-year-olds the ability to sign on and sign up for $100,000 worth of debt and we think that’s responsible policy.&#8221;
&#8220;I’m greatly looking forward to the Biden administration canceling student loan debt and no longer advancing the false narratives that student loan debt is for the privileged,” she added. “What a ridiculous assertion. Do we really think that a billionaire’s child is taking student loans?&#8221;
Though Biden has <a href="https://www.dailywire.com/news/biden-pauses-student-loan-repayment-until-2022">refused</a> to unilaterally forgive student debt, he extended the moratorium on payments for Department of Education loans until 2022 following pressure from the progressive faction of his party.
“This will give the Department of Education and borrowers more time and more certainty as they prepare to restart student loan payments,” the White House said. “It will also ensure a smoother transition that minimizes loan defaults and delinquencies that hurt families and undermine our economic recovery.”
Warren, however, said that delaying student debt is <a href="https://www.dailywire.com/news/warren-says-that-canceling-50000-in-student-loans-is-a-racial-justice-issue">insufficient</a> — calling debt forgiveness an “economic justice issue” and a “racial justice issue.”
“The President does have the power to cancel student loan debt,” she told CNN anchor Don Lemon. “And you know how I know that? Because President Obama did it, President Trump did it, and President Biden has already done it. President Obama did it for several million people. President Trump did it when he said ‘For all 43 million people without standing student loan debt, I forgive your interest and you can spend payments.’ That’s canceling your interest — not delay it, cancel it.”
“And President Biden has done both of those things,” she continued. “So Presidents have the power, they have used the power — I just want to see him use that power to cancel $50,000 in student loan debt.”
“African-Americans borrow more money to go to school, more money while they’re in school, and have a harder time paying it off when they get out of school,” Warren noted. “Canceling $50,000 of student loan debt would help close the black-white wealth gap for people with student loan debt by twenty-five points. And for Latinos, by twenty-seven points.”
In quarter two of 2021, the Federal Reserve <a href="https://www.cnbc.com/2021/09/09/america-has-1point73-trillion-in-student-debtborrowers-from-these-states-owe-the-most.html">estimated</a> that Americans owe $1.73 trillion in student loans.

Joe Biden AOC

AOC Spars With Biden Over Canceling Student Debt 

Alexandria Ocasio-Cortez

A report from the Federal Reserve Bank of New York reveals that American households now hold over $15 trillion in debt.
In the second quarter of 2021, debt increased by $313 billion — a 2.1% increase and the largest jump observed since the fourth quarter of 2013 — to hit a total of $14.96 trillion.
The central bank <a href="https://www.newyorkfed.org/newsevents/news/research/2021/20210803">explained</a> that beyond consumer and education spending, housing debt was the main driver of the increase:
<blockquote>Mortgage balances — the largest component of household debt — rose by $282 billion and stood at $10.44 trillion at the end of June. Credit card balances started to tick back up, increasing by $17 billion in the second quarter. Despite the increase, credit card balances were still $140 billion lower than they had been at the end of 2019. Auto loans increased by $33 billion, while student loan balances decreased by $14 billion. In total, non-housing balances (including credit card, auto loan, student loan, and other debts) grew by $44 billion, with increases in auto loans and credit card balances offsetting the decline in student loan balances.</blockquote>
The report adds that federal stimulus measures are responsible for lower levels of delinquency:
<blockquote>Aggregate delinquency rates across all debt products continued to decline since the beginning of the pandemic recession, reflecting an uptake in forbearances provided by both the CARES Act and voluntarily offered by lenders. These supportive policy measures continue to be visible in the delinquency transition rates, as the share of mortgages that transitioned to delinquency hit a record low of 0.4%.
The share of student loans that are reported as delinquent remains very low as the majority of outstanding federal student loans remain covered by CARES Act forbearances. Auto loans and credit card delinquency transition rates also continued to decline, reflecting the impact of government stimulus programs and bank-offered forbearance options for troubled borrowers. </blockquote>
&#8220;We have seen a very robust pace of originations over the last four quarters with new extensions of credit for mortgages and auto loans combined with rebounding demand for credit card borrowing,&#8221; commented New York Fed Center for Microeconomic Data administrator Joelle Scally in the central bank’s release. &#8220;However, there are still two million borrowers in mortgage forbearance who are vulnerable to financial distress once the forbearance programs come to an end.&#8221;
The report emerges as federal lawmakers continue to push for more debt cancellation and delay measures.
For one, Senate Majority Leader Chuck Schumer (D-NY), Sen. Elizabeth Warren (D-MA), Rep. Ayanna Pressley (D-MA), and other progressives have been urging President Biden to unilaterally <a href="https://www.dailywire.com/news/warren-says-that-canceling-50000-in-student-loans-is-a-racial-justice-issue">forgive</a> up to $50,000 in student loans. For another, President Biden’s Centers for Disease Control and Prevention <a href="https://www.dailywire.com/news/biden-reinstates-ban-on-evicting-renters-threatens-landlords-with-jail-time-up-to-250k-fines">extended</a> a moratorium on evictions originally created by the Trump administration in response to COVID-19 and the lockdown-induced recession, threatening landlords with fines of up to $250,000 for kicking out tenants.
Non-housing debt currently <a href="https://www.newyorkfed.org/microeconomics/hhdc.html">amounts</a> to $4.19 trillion; housing debt amounts to $10.76 trillion.

Federal Reserve

U.S. Household Debt Reaches All-Time High Of $15 Trillion

On Friday, The Daily Wire’s Matt Walsh retweeted a post from NPR in which the news organization writes: “Elizabeth Warren has pledged to cancel up to $50,000 of debt for 95% of student loan borrowers if she&#8217;s elected president – and she says she could cancel those debts all on her own.”
Walsh wrote above the tweet:
<blockquote>No such thing as &#8220;canceling&#8221; debt. If we&#8217;re being honest, we&#8217;d call it what it is: debt transfer. We&#8217;d be transferring debt from the people who took out the loans to people who did not take out the loans. Of course it sounds utterly unjust and crazy when you put it like that.</blockquote>
<blockquote class="twitter-tweet">
No such thing as &#8220;canceling&#8221; debt. If we&#8217;re being honest, we&#8217;d call it what it is: debt transfer. We&#8217;d be transferring debt from the people who took out the loans to people who did not take out the loans. Of course it sounds utterly unjust and crazy when you put it like that. <a href="https://t.co/evrD4phn2O">https://t.co/evrD4phn2O</a>
— Matt Walsh (@MattWalshBlog) <a href="https://twitter.com/MattWalshBlog/status/1218162030236008454?ref_src=twsrc%5Etfw">January 17, 2020</a></blockquote>
The article linked in NPR’s <a href="https://www.npr.org/2020/01/14/796329598/cancelling-student-debt-is-easier-than-it-sounds?utm_source=twitter.com&amp;utm_campaign=npr&amp;utm_medium=social&amp;utm_term=nprnews">tweet</a> suggests that Warren could accomplish the alleged “cancellation” of student debt without Congress.
Here’s the <a href="https://elizabethwarren.com/plans/student-loan-debt-day-one?source=soc-WB-ew-tw-rollout-20200114">direct text</a> from Warren’s own website:
<blockquote>But the Department of Education already has broad legal authority to cancel student debt, and we can’t afford to wait for Congress to act. So I will start to use existing laws on day one of my presidency to implement my student loan debt cancellation plan that offers relief to 42 million Americans – in addition to using all available tools to address racial disparities in higher education, crack down on for-profit institutions, and eliminate predatory lending&#8230;
When I am president &#8230; I’ll direct the Secretary of Education to use their authority to begin to compromise and modify federal student loans consistent with my plan to cancel up to $50,000 in debt for 95% of student loan borrowers (about 42 million people).</blockquote>
While Walsh’s tweet has more than 13,400 “likes” as of publication, and approximately 3,700 retweets, some commenters don’t seem to understand the idea that the government cannot “cancel” debt.
User @EllenGirl71 wrote: “There *is* debt forgiveness. It means that no one will be paying it back. The US government federal student loan debt can be forgiven any time the US govt decides to forgive it.”
There were numerous commenters who tried to argue with @EllenGirl71, but the following two exchanges were some of the more illuminating ones.
@MarkFidelman wrote: “Sorry Ellen, the money came from tax dollars or private investors. Someone lost in that transaction. It also sends a chilling message to future taxpayers and investors that the government can’t be trusted.”
<blockquote class="twitter-tweet">
Sorry Ellen, the money came from tax dollars or private investors. Someone lost in that transaction. It also sends a chilling message to future taxpayers and investors that the government can’t be trusted.
— Mark Fidelman (@markfidelman) <a href="https://twitter.com/markfidelman/status/1218553641616867329?ref_src=twsrc%5Etfw">January 18, 2020</a></blockquote>
Ellen replied: “The borrowers are also taxpayers, and they and the country are losing in this transaction. I would prefer that they spend that $1 trillion in the economy. The status quo of high household debt is the one unacceptable choice.”
<blockquote class="twitter-tweet" data-conversation="none">
The borrowers are also taxpayers, and they and the country are losing in this transaction. I would prefer that they spend that $1 trillion in the economy. The status quo of high household debt is the one unacceptable choice.
— Ellen (@EllenGirl71) <a href="https://twitter.com/EllenGirl71/status/1218608123830849536?ref_src=twsrc%5Etfw">January 18, 2020</a></blockquote>
In another exchange, @TheProbableMatt wrote: “It is absolutely magic. Grants &amp; gifts also cost money. Where is that money coming from? It has to come from somewhere. And that somewhere is almost always future taxation rather than budget cut somewhere else. even then the federal govt does not generate income. They take ours.”
Ellen replied: “Nothing magical about forgiving a loan. It does not get transferred to someone else. No one else owes that money now. If I forgive you the 500 I lent you, no one else has to pay me back. The money just stays in your pocket.”
Matt shot back: “And it still came out of your pocket. You are expecting the government to eat the $500. The govt doesn&#8217;t eat money. They tax. This is how economics work.”
<blockquote class="twitter-tweet">
Nothing magical about forgiving a loan. It does not get transferred to someone else. No one else owes that money now. If I forgive you the 500 I lent you, no one else has to pay me back. The money just stays in your pocket.
— Ellen (@EllenGirl71) <a href="https://twitter.com/EllenGirl71/status/1218257303708880897?ref_src=twsrc%5Etfw">January 17, 2020</a></blockquote>
<blockquote class="twitter-tweet" data-conversation="none">
And it still came out of your pocket. You are expecting the government to eat the $500. The govt doesn&#8217;t eat money. They tax. This is how economics work.
— Matt Meyer (@TheProbableMatt) <a href="https://twitter.com/TheProbableMatt/status/1218258168511434752?ref_src=twsrc%5Etfw">January 17, 2020</a></blockquote>
As Walsh and others stated, debt cannot simply vanish. It must be shifted.
Here’s an imperfect and very simplified, but apt analogy.
There are five siblings. Two of the five went to college, while the other three started their adult lives working in trades. All five siblings live at home with their parents in their large house, and pay rent.
The two who went to college each borrowed $50,000 from their parents in order to obtain their degrees. So, in addition to paying their parents $700/month for rent, they shell out an additional $300/month in loan payments. That’s $1,000/month, respectively.
The two college-educated siblings are struggling, so their parents decide to “cancel” their collective debt. At this point, the combined debt of the two siblings stands at $60,000.
In order to recoup their investment, the parents who have “cancelled” the debts of their college-educated children raise the rent on all five siblings to $820/month, thus equally distributing the collective debt. Now, the college-educated siblings only pay an additional $120/month, but the three siblings who never borrowed any money in the first place have the $120/month burden as well.
This is a stripped down version of how such debt “cancellation” would work in a system in which individuals borrow money from the government.
Debt does not disappear, but is simply redistributed.

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