Student Debt Cancellation Challenged

In what was an inevitable move, Pres. Joe Biden’s plan to unilaterally cancel up to $20,000 in student debt, costing taxpayers around a half-trillion dollars overall, is being challenged in federal court.

The conservative Pacific Legal Foundation is bringing a suit in the federal district court for southern Indiana, arguing that Biden’s use of the HEROES Act as justification for his move was a misuse of that law.

To get access to the court you need standing, so PLF found a plaintiff who says that he doesn’t want the relief on his student loan and will be forced to pay state income taxes in Indiana on the unwanted gift. That strikes me as tenuous and, in fact, the White House claims that anybody who doesn’t want the handout simply doesn’t have to take it.

But even if this particular suit gets tossed on technical grounds, the PLF is fighting the good fight here and their underlying argument is hard to refute. HEROES was adopted while the country was fighting two wars in Iraq and Afghanistan and it was clearly intended to benefit veterans. Using it for this purpose is a big overreach and nobody should think that any president spending a half-trillion dollars without Congressional authorization is a good idea. Certainly, the Supreme Court didn’t think so when it struck down climate change rules this summer. If opponents of the student debt giveaway can get their case to the high court it’s very likely this thing will get stopped.

Biden’s move should certainly be struck down on legal grounds, but even it were legal it would still be awful public policy. I’ve made these argument before, but here’s a quick summary.

Biden’s paying off my loan? Seriously, dude?!

It’s unfair. What about everyone who didn’t go to college or did and dutifully paid off their loan? About 70% of Americans do not have a four year degree.

It doesn’t hold people accountable. Borrowers should have known what the repayment schedule would look like and what their major would bring in terms of income, and they signed a contract to pay back the loan.

It targets a half-trillion dollars at the most affluent Americans. College grads make almost twice as much over a career as those with a high school diploma. Yes, I know Biden put on some income restrictions, but those are just a snapshot in time. They don’t account for earnings over a career.

It sends the wrong message. What if you’re a college freshman today? Why not take out all the loans you want with the idea that you’ll never have to pay them back?

It doesn’t solve the problem. What do we do next year when more students graduate with debt? And there’s nothing in Biden’s plan that addresses the cost of college.

And finally, it doesn’t account for the fact that student debt is actually a good investment. The average student debt is $28,000 and a college degree will get you on average about $1.2 million in greater earnings over a career. That $28,000 seems like a good investment to reap $1.2 million. The whole notion that there is a “student debt crisis” is questionable at best.

But if you like this idea none of those arguments will persuade you. Student debt forgiveness has become the holy grail of the hard-left.

One of their counterarguments is that we’ve shifted the cost of a college education from taxpayers to students. Even if that were true it doesn’t excuse a borrower from looking at the numbers and making a responsible decision. The housing market changes over time as well. Interest rates go up and down. It’s a sellers’ market, than a buyers’ market. A house you could afford last year, you can’t afford this year. None of that excuses home buyers from buying only what they can afford. It’s just the same for college. You might not be able to go to the school that’s your first choice or you might have to choose a more lucrative major or you might have to work and take longer to graduate. Life’s that way. Sorry.

But at the UW this argument about cost shifting isn’t even true. Tuition at the UW System has been frozen since 2013. At Madison that’s $10,722. Applying inflation since then, tuition would be $13,631. That’s a savings of $2,909 this year or 27%. That’s cost shifting away from students and toward taxpayers.

Student debt forgiveness so violates my fundamental values when it comes to personal responsibility and fairness that it makes me question why I think of myself as a Democrat. And it’s terribly regressive. Sending money from less affluent Americans to better off ones used to be a Republican policy, but now the Democrats have adopted it. It reflects what’s happened to my party. We used to be the party of the working class and now we’re the party of college graduates, and entitled college grads at that.

This lawsuit was sure to happen and now that it has let’s hope that it, or another one that’s better at establishing standing, succeeds.


Published by dave cieslewicz

Madison/Upper Peninsula based writer. Mayor of Madison, WI from 2003 to 2011.

2 thoughts on “Student Debt Cancellation Challenged

  1. No surprise. Biden can proclaim he (mostly) fulfilled his campaign promise and now the Democrats have ammo against the evil Republicans.

    There IS a student debt crisis for some people. Blanket statements that college is worth it are why many of them are in trouble. Students have to do the math for their own personal situation and redo the math every year. Predatory government lending and spendthrift Universities aren’t going anywhere.

    At one time Madison was known for having more cab drivers with PhDs than anywhere in the country. Urban myth or no?


  2. You know I agree with you on the merits but I get tired of the talk of this “costing taxpayers”. First, usually student loan borrowers are taxpayers already and when they pay off their loans it is costing them the same amount it would cost the “tax payers” for student loan forgiveness, so it is a good sounding argument but means nothing because the money will be paid either way. The argument is just about shifting the burden. Either way student loan debt will cost the American public the above stated number…it’s just a matter of who is paying it.

    Also, I’m starting to get the feeling you don’t know a whole lot of younger people…just based on the way you write about them. If you did you might realize not all college degree earners are making something other than a blue collar living and many of them work hard without whining about it.


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