Biden revives student loan scam

OPINION:

President Biden won’t take no for an answer. The Supreme Court struck down his attempt last year to purchase college-age votes with an unlawful loan forgiveness scheme, but the Big Guy is doing the same thing all over again.

“While a college degree still is a ticket to the middle class, that ticket is becoming much too expensive — much too expensive,” Mr. Biden told a Wisconsin audience on Monday.

Never mind that what he has in mind will only drive tuition rates skyward.

Republicans wasted no time in filing lawsuits to stop the White House from implementing the proposed $475 billion rule without a vote in Congress. Mr. Biden’s press secretary, Karine Jean-Pierre, said Monday that legal niceties are “not going to stop the president from acting and taking action, like he is today.”

As many as 30 million potential voters would be able to pocket individual debt relief of up to $20,000. The proposal ignores laws governing repayment to add carveouts that, for example, subsidize those enrolled in degree programs “for which total costs exceed the financial benefits provided to students.”

Loan repayments will be made for college graduates who discover “too late that their postsecondary programs did not adequately prepare them for the workforce.” The idea is to convert student loans into student grants by making loan forgiveness — an option meant for extreme and unforeseen circumstances — the default option favoring those who make bad decisions.

Even with the Senate under Democratic control, Sen. Elizabeth Warren of Massachusetts can’t get a committee to consider the debt forgiveness legislation she has been pursuing. Congress hasn’t touched the student loan program since 2010.

It’s rather undemocratic, perhaps one could even say authoritarian, to have a president spend half a trillion dollars of public money without a single vote in favor of the idea.

The plan does appeal to a key constituency, however. Democratic administrations are beholden to the whims of teachers unions at the primary school level and to the left-wing academic faculties of higher education. Mr. Biden’s $2 trillion coronavirus spending extravaganza, for example, included a $12 billion bailout for colleges that even rewarded Ivy League institutions sitting on billion-dollar endowments.

As long as colleges and universities can count on Uncle Sam to pick up the tab, they have no incentive to reduce tuition rates from the absurd levels they have set. In Ms. Warren’s home state, Harvard charges $82,000 per year, despite a $51 billion endowment that could comfortably cover the cost of its educational offerings in perpetuity.

Why bother, though, when federally subsidized loans enable more important priorities, like paying top college administrators between $2 million and $9 million a year?

The better way to discount the “ticket price” of colleges is to cut off the federal subsidies and tax endowments that aren’t used to reduce tuition. The status quo won’t change until ivory towers are pressured to set competitive rates. Otherwise, they’ll continue padding their own administrative salaries at taxpayer expense.