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Democrats Turn to Student Loan Forgiveness in Midterm Ploy

AMAC Exclusive – By Shane Harris

Student loan
President Joe Biden meets with Senators to discuss student loan debt in the Oval Office of the White House.

With the midterms just over three months away, Democrats are ramping up the pressure on President Joe Biden to implement mass student loan forgiveness in a ploy to energize the party’s base for the midterms. But even as the Department of Education says it’s prepared to cancel all student loans at a moment’s notice, there are growing signs that mass student debt cancellation – in addition to being a dangerously irresponsible fiscal policy – may not be the political winning issue Democrats think it is.

According to reporting from Politico earlier this week, “top Education Department officials have developed detailed plans to carry out student loan forgiveness for millions of Americans as they wait on President Joe Biden to make a final decision” – a decision that some Democratic insiders believe could be coming in a matter of days. After promising on the campaign trail to forgive at least $10,000 in student loan debt per borrower, Biden has thus far opted to only extend the pause on loan payments that began as a pandemic relief measure in March of 2020. This strategy has frustrated many Democrat officials and voters, who had hoped that Biden would make loan forgiveness a priority immediately upon entering office.

One major reason for the delay appears to be internal debate among Democrats, and even some senior officials within the White House, about what Biden’s student loan forgiveness program should look like. While Biden promised $10,000 per borrower when he ran for president two years ago, some far-left congressional Democrats like Senator Bernie Sanders of Vermont have called on Biden to cancel all $1.8 trillion of student debt held by the federal government. The administration is also reportedly weighing whether or not to place an income cap on who would be eligible for debt cancellation, with one internal Department of Education memo proposing a threshold of $125,000 for individuals and $250,000 for families.

Regardless, Biden’s decision on student loans will have to come in the next few weeks, as the current pause on loan payments expires August 31. Biden could extend the pause again through Election Day, but doing so would miss what many Democratic strategists believe to be a key opportunity to boost their prospects this November. Specifically, Democrats hope that student loan forgiveness will inspire turnout among voters under 45 – a cohort of Americans that collectively holds more than 54% of all student loan debt and voted for Biden 56%-42% percent in 2020, but has soured on him since.

But even if Biden does cancel some or all student loan debt, there is reason to question how much goodwill it will actually earn Democrats with voters. The vast majority of student loan debt is held by higher-income households, meaning that student loan forgiveness is in effect a government welfare plan aimed squarely at the comparatively wealthy – even as poorer Americans suffer more as a result of inflation. A family struggling to afford gas and groceries on the median U.S. household income of $67,000 would be justified in being enraged at the fact that a household bringing in $250,000 receives tens of thousands of dollars in loan forgiveness from the federal government while they receive nothing. For every hypothetical voter that Democrats gain from Biden canceling their student loans, it is not unreasonable to think they might lose one (or more) voters who are resentful of the policy. (If Republicans aggressively prosecute the case, that is.)

Economists have also raised concerns that mass student debt cancellation would likely exacerbate already sky-high inflation rates and could lead to more economic turmoil as the country enters a recession. Even forgiving just $10,000 per borrower would cost some $230 billion – an alarming prospect for a country already suffering from the effects off too much government spending. As Ed Mills, an analyst with Raymond James investment bank, told CBS News, “If you had to put it [student loan forgiveness] in one bucket or another, it’s more in the bucket of contributing versus not contributing to inflation.”

As many conservatives have pointed out, “debt cancellation” is in itself a misleading term; from a financial standpoint, the debt would not be truly “cancelled,” only transferred. The burden of student loan debt would be assumed by the U.S. government, and by extension American taxpayers – many of whom did not go to college precisely to avoid having to pay back student loans.

Even parts of the liberal mainstream media aren’t on board with the plan. The New York Times Editorial Board slammed student loan forgiveness back in May as “legally dubious, economically unsound, politically fraught and educationally problematic.” A Forbes article called it “bad policy and bad politics.”

Yet as with most other issues, the Biden administration seems beholden to a small cadre of far-left activists and politicians who drown out all other voices. With the litany of other crises weighing down Democrats’ electoral prospects, using student loan forgiveness as a political gimmick was never a particularly promising strategy. But given the economic state of the country and the specifics of the Biden plan, it may just be the final nail in Democrats’ coffin this November.

Shane Harris is a writer and political consultant from Southwest Ohio. You can follow him on Twitter @Shane_Harris_


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tika
6 hours ago

the carrot that will never be eaten.

pete
1 day ago

Higher education is a liberal disgrace to call a spade a spade. the hierarchy of ‘notable schools’ are all liberal manure holes, and the idea of more and more education,; and more money thrown at it for at best dubious results. I’m not against education, but as it exist in this country is a financial and social black hole.

DrScottD
1 day ago

Shane Harris/AMAC Take some time and report how much Student Loan Debts these Democrats in the US House have not paid yet? How much do They owe? Their close family members owe? I’m sorry to tell you but just those known as the 5, with AOC, and ilk, it’s over a million dollars!!Good grief American Citizens, WAKE UP

Michael Lewis
2 days ago

Currently reading a interesting novel by John Grisham, “The Rooster Bar” on this topic. Perhaps students were hyped with lies that a degree would insure good jobs on graduation that don’t exist?

Henry D
2 days ago

Here we go again, Biden played this “Trump card” as a plank in his campaign back then to buy the student vote and hasn’t paid it off yet (??), how dumb does he think college students are???? I will feel VERY cheated having worked hard ( and summer educated in the Lumber Mill business ) substituting for the regular employees going on vacation, to NOT incur a student debt; what is in this handout for ME other than more taxes? Democrats are just alienating everyone who has already paid their loan or never incurred one to start with NEVER to vote for a Democrat until he or she no longer remembers this “slap in the face”; they just UN-BOUGHT my vote; hope all you passed college graduates feel the same way.

Ty
3 days ago

Vote buying is all about passing a bill that has enough money in it to upfront pay donors and buy votes like students, who can’t add anyway!

Mimi
3 days ago

My grandson is starting community college this fall because of costs. He made sure that all of the credits from his major will transfer to university when he gets his masters. He is working and saving his money to pay for his education. No big loans to pay off!! It will take longer, but it will keep him out of debt. Good conservative boy, he had already learned that a democrat in office is bad for his economy!

Bruce P
6 hours ago
Reply to  Mimi

Smart kid.

Becky
3 days ago

If this happens I DEMAND refund of my student loan I paid off in the 1970s!
What is good for the goose is good for the gander.
Equality demands FAIR play, government crooks.

Stephan
2 days ago
Reply to  Becky

I’m a retiree who went back to school to start a second career. I started my business and payed off my student loans in record time 18 months ago. My son, a Chemical engineer, paid off his loans around the same time. Now we’re supposed to pay off loans for wealthy people?Not going to happen.

Rick
3 days ago

Someone said they wouldn’t forgive the Democrats if student loans are paid. Well , should they be forgiven for the summer of love in Seattle and Portland, for the destruction of history in many cities across America. How about no bail for murders, rape, burglary in all our cities across America. I think not !

BAE
3 days ago

Student loan transfer to the American taxpayer. So WRONG! The college should stop charging enormous amounts of money for a questionable education. Blame the universities. Don’t steal $$$ from hard working people, so democrats can get more votes. AWFUL……….

Ed Norton
3 days ago

We have a generation with no fiscal responsibility…I’m talking about the administration and congress.

Jerrry
3 days ago

Biden still trying to BUY Votes for the years to come. 102,000 people died from the drugs that Biden, Harris and Pelosie do to the open borders. They want the Illegals to vote.They should never vote until they are Legal and take the test. IMPEACH Biden, Harris And Pelosi. I stand by this.
U.S.M.C. Vet…

William C Smith
3 days ago

Seems they intend to cause as much damage possible before being tossed from office.

Sharon
3 days ago

Perhaps these people should have thought about cost vs benefit BEFORE taking on massive debt. It is completely wrong to expect other people (who paid their tuition) to pick up the tab.

Brian
3 days ago
Reply to  Sharon

I agree, what they should do is remove the “Windfall Elimination Provision” from SS and give us our full earned amount each month.

JayA
3 days ago

How is this fair to millions of students that worked their tails off to pay off their student loans? I predict this brilliant DemonRAT idea will go over like a turd in a punch bowl!

edward
3 days ago
Reply to  JayA

unfortuneatly, there are plenty of “useful idiots” out there who dont care and expect someone else to pay their way, dont forget “free healthcare for all”!
typical communist ploy, appeal to “useful idiots”.
Boy did lenin get that one right!

Becky
3 days ago
Reply to  edward

Huh. I’m “not allowed” to up vote you. I do so anyway.

frank Kelly
3 days ago

Criminals all!!

Jake the snake
4 days ago

Well student loan forgiveness has about 25% support and it is all from young people who know they are being greedy. The other 75% are tax payers who either did not get to go to college or went to college working their way through or have paid off their loans. The result is they know the students could and should pay back their own loans.

This is a lower for the democrats, however all they know is lying, bribery, and corruption. So they will do it.

This will make everyone say hey youbsaid it was treason when trump moved money to pay for the wall and now you are doing it to cover college people’s poor choices.

Smike
4 days ago

As many conservatives have pointed out, “debt cancellation” is in itself a misleading term; from a financial standpoint, the debt would not be truly “cancelled,” only transferred. The burden of student loan debt would be assumed by the U.S. government, and by extension American taxpayers – many of whom did not go to college precisely to avoid having to pay back student loans.

I don’t think people are understanding this. Read this part carefully. You tax money was used to finance student loans. It was paid to the universities the student signed up with. The program looked very promising initially. Student goes to college, gets degree, gets high paying job, pays lots of taxes and repays loan in a few years. So what happened, why didn’t that simple plan work? Personally, I’d like to hear the stories, what happened? Tell me the story, how did people accumulate $10k,30K,100K in student loan debts that they can’t pay?

PIDL
3 days ago
Reply to  Smike

The colleges were complicit in securing student loans, not really caring about how it would affect their students. They just wanted tuition and money from other possible sources. In a small school in Minnepapolis, they give my son loans to pay for a shared condo with other students.I refused to cosign the loan. But somehow the loan was okayed. I am guessing there was a lot of kickback from the condos to the school. Somehow, most of his student loan debt was forgiven. He only had to pay a fraction of it, ~$2500, to get the loans closed. But this was 10 years after he was out of college.

Of course there were all the claims from the school that there were thousands of jobs out there requiring the degree he would end up with. And they would help them secure a job. This was ALL LIES. The jobs salary levels were extremely low. The colleges did not tell the students this fact when they recruited them. They really did not care about the students.

I heard the “would help secure a job” when I went to college in the early 1970s. But I thought then they would be of very little help in getting me a job. I discovered that to be very true.

This world is so corrupt with many liars and cheats running everything. It seems like the world is run by used car saleman!

Becky
3 days ago
Reply to  PIDL

It truly is. Great analogy.

Mandy
4 days ago

Democrats don’t want to even go this route. They will never win another election because people that went to college and paid for it will never forget this.

If Democrats wanted to really do something they would contact the colleges and find out why it is so expensive these days. It was always expensive but it is outrageous these days. Professors are paid huge salaries is one reason and I’m sure there are other places where they could cut the cost of higher education.

Bob Olden
3 days ago
Reply to  Mandy

Huge universities are dinosaurs. Knowledge acquisition has never been more accessible to anyone who is self motivated. Sure it’s nice to have a comfy dorm room where you can play video games and fool around with girlfriends, while you sleep through lectures and absorb political correctness while you are awake. Get your sheepskin and go work at Starbucks.

There is so much money thrown at these places to prop them up! If they didn’t get federal grants and loans they would die out like the dinosaurs did. Maybe our country will have to face the fact that we are broke and that will be a good thing. All the genius faculty that enables immature students to think they are smart would be out on their rear ends.

Education does not have to be expensive. But a student has to want it and needs wisdom to sort out what is good from what is worthless. Character is more important than IQ. Biblical values matter!!

johnh
3 days ago
Reply to  Mandy

Agree, some University Presidents have salaries of +$1 Million & more than a few colleges are paying the head football coaches +$2-4 Million. The universities have jumped on the same greedy bandwagon that the CEOs of Corporations have done since 1990s.

PIDL
3 days ago
Reply to  johnh

This has been going on for decades. They built the President at SIU a multi-million dollar home when I was going to school there in the aerly 1970s. A few years after I graduated, a beer company built a huge new football stadium for them for a share of football game proceeds (beer sales). We see the same greed and avarice from the universities as we see in the rest of the world.

RogerK
4 days ago

Not only will student loan “transfer” bust the economy even more than it is now, imagine how much colleges will be reckless in their budgets and increase tuition when they find out the government will end up paying off the loans.

PIDL
3 days ago
Reply to  RogerK

And the loan availability is what caused this in the first place, just like health insurance has caused the increase in medical costs.

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