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3 Biden Lies About His Student Debt Bailout Scheme

Posted on Wednesday, September 7, 2022
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by Outside Contributor
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By my count, there are at least three lies behind President Joe Biden’s “student loan relief” plan: a bald-faced lie, a half-lie, and a lie of omission.

First, in its Aug. 24 “fact sheet,” the White House advances the falsehood that college is the “ticket to a middle-class life.” That’s untrue.

The ticket to a middle-class life, now as ever, is finishing high school, working a full-time job, and getting married before you have kids. A recent report by the Institute for Family Studies by scholars Wendy Wang and Brad Wilcox lays out the data brilliantly. A stunning 97% of adults who follow those steps are middle-income or higher.

A middle-class life is eminently attainable without a college degree.

Why would the White House want to get this wrong? Maybe because it prefers to advance a narrative of government dependency over one of personal agency. But that’s a shame. Why not tell young people, as author Ian Rowe does, that it’s within their power to rise above their circumstances through hard work, thrift, and sensible life choices?

If young people are victims in the higher education business, it’s as victims of a political rhetoric that sells short the good effects of old-fashioned virtue while vastly exaggerating the benefits of degrees and credentials.

And what if you do go to college? Studies show that high price tag degrees don’t add value to lifetime outcomes. Students do just as well attending low-price institutions as prestige colleges, but those attending the latter are more likely to carry loan debt.

So, the Biden plan looks like a taxpayer-funded bailout for those who chose pricey schools over less expensive ones, insulting the previously frugal and creating moral hazard for the next generation of student loan borrowers.

Second, the White House “fact sheet” states that the “total cost of both four-year public and four-year private college has nearly tripled” since 1980, and that federal support “has not kept up.” In this case, the lie is in the second part.

While total costs have indeed ballooned, it wasn’t a proverbial “act of God.” Instead, the federal support the White House claims “has not kept up” is in fact the single-biggest reason why tuition prices keep rising. Economists estimate that 60% of federal credit extended to student borrowers through subsidized loans gets “passed through” in the form of higher tuition prices.

Colleges and universities see federal guaranteed loans for students as money on the table, and tuitions get hiked to capture those dollars. It’s a vicious cycle: Feds offer student aid in the form of grants and loans; that aid props up artificially high demand, given tuition prices; and voila, tuitions rise again. Rinse and repeat.

But reading from the White House “fact sheet” would lead you to think that the government has barely dipped its toe into the troubled waters of high college prices.

After reporting that Pell Grants now cover only one-third of the cost of a four-year public college degree (down from 80% in 1980), the “fact sheet” gravely points out that federal student loan debt has skyrocketed to $1.6 trillion.

So, the federal government is not a bystander after all. It has been eagerly handing out loans to students for degrees that many of them won’t even finish, helping to create degree inflation and saddling adults with decades of monthly payments.

Since degrees aren’t necessary for a middle-class lifestyle, and since all that debt negatively affects student borrowers (as the White House admits), one might conclude we should wind the whole thing down. Admit we’ve been telling kids a lie and making them pay for it. But the White House’s conclusion is that we should cancel the loans for those who don’t make enough money and keep the whole system going.

The third lie is harder to spot because it’s unstated.

The entire loan-relief plan carries on as though there is no other solution to the problem of student debt than this giant, unfunded $500 billon taxpayer giveaway (which is inflationary in a time of yet uncontrolled inflation). That’s ludicrous. There are many other solutions, ranging from refinancing to private charities.

But the simplest solution is probably the best one: First, own up to the fact that colleges and the federal government have been in cahoots to foist unconscionable debts on millions of Americans for degrees of questionable worth. Second, back away and let universities find a way to offer their goods and services without special subsidies muddying the waters.

For students who are now least likely to graduate, that will probably mean no college—and no debt. That’s a clean slate as they begin their working lives. For those most likely to graduate but who lack the means, it will point to more private loans, like the ones I just co-signed for two of my sons this year, with higher interest rates and, after needed regulatory reforms, better loan screening to figure out who is likely to graduate.

Finally, it would shift the burden from taxpayers to colleges to figure out how to pay for students who deserve to be there. Such a change might induce some colleges to funnel a greater share of endowment dollars into student aid. But it might well induce other schools to trim bloated administrative offices and theme park-style amenities for students, and try a fresh approach: competing on price.

In a couple of decades, two problems might be solved at once—the student loan crisis and the rising tuition crisis.

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Kim
Kim
1 year ago

With all this “free” money passing from federal student loan programs to the colleges, anyone with a pulse and a pencil qualifies. That serves the purposes of the college and the family, but it now passes the burden for repayment to the rest of us taxpayers. Why would I want to pay for someone’s degree in poetry of the dark ages or some other worthless discipline that makes no contribution to our society?

Obama’s idea of taking over student loan programs was a big mistake. First thing he did was raise the interest rate on the loans.

Instead, let the colleges and universities compete for good students. Let them provide loans from their already existing enormous stashes of money. If that whittles down the number of students bound for college, that could be a good thing. Maybe we’d see less political indoctrination and fewer socialists coming out of our institutions of “higher” learning. It might even encourage high schoolers to open a book now and then and become better students, knowing they have to compete for a slot at their school of choice.

Biden’s idea of making us responsible for footing the bill for people we don’t know is another big mistake. That cheapens the college experience for students and teaches them all sorts of bad lessons. Leave it to the dems to come up with really bad ideas.

Juanita
Juanita
1 year ago

It’s 12:30 am here in Alaska I was awakened by this feeling
THAT BIDEN FOGAVE THE STUDENT DEBT IN ORDERED TO USE ALL THE STUDENTS HE FORGAVE THE STUDENTS LOANS TO AS MILITIA. PEOPLE DO NOT VOTE DEMOCRAT

THAT IS IS WHY GRIFFETH IS SAYING IF YOU DO NOT VOTE DEMOCRAT THERE WILL BE RIOTS
ALL THIS STUDENTS THAT BIDEN IS FORGIVING THEIR DEBT IS SOME KIND OF HIRING THE STUDENTS TO RIOT
THAT IS HOW MEXICO DO IT THAT IS HOW
DOMINICAN REPUBLIC DOES
COLOMBIA.
EL SALVADOR VENEZUELA
THAT IS WHY WE CAN NOT FIND WORKERS
BIDEN HAD HIRE THE YOUNG PEOPLE
HE GIVES THEM CHECKS CARES FOR ALL THEIR DEBT
IF YOU CHECK AMONG OF ALL YOUNG PEOPLE ONLY WERE PAID THE YOUNG PEOPLE WHO WILL RIOT FOR BIDEN IF THEY NOT FOR AL BIDEN I DO NOT THINK THEN THEIR DEBTS ARS FORGIVEN
HIS NEW WAY OF CHEATING.

All what Biden say is distraction
So that you do not check

Garye
Garye
1 year ago

How can it be that anyone would continue to support the marxist democrat party and all their lies???
NOTHING they say has ANY basis in facts or Truth.
EVERY policy is a FAILURE.
They promote racism,divisiveness, class envy,immortality, anti God,America and Family.
WHAT is wrong with ANYONE who would think these are good things???
WAKE UP and look at reality, the marxist democrat party is a disgusting,useless CLOWN SHOW!
WHO would want to be associated with that – RUN!!!

Hal
Hal
1 year ago

Biden lied in a speech??? That’s easily determined … his lips were moving!

jocko
jocko
1 year ago

NEVER, EVER TRUST A liberal OR A chimp

Jeb
Jeb
1 year ago

Biden is a walking talking lie. The sooner Americans come to grips with this the sooner America can move forward and stop pretending.

Tom
Tom
1 year ago

Excellent article that hits the points that I have been driving. The fed backed loans have allowed the universities to continually increase their tuitions, but that is only the start. Housing costs have skyrocketed as well.
Time to get the Fed out of indoctrinating our children and let the colleges fight for their students, forcing the cost of college to go down as enrollment declines. Trade schools are the answer for many attending colleges

Pat Dilling
Pat Dilling
1 year ago

Another subtle, even sneaky, reason that Biden and the Democrats promote college education is that universities have become tremendous indoctrination mills for liberalism. Liberal college professors are given a captive audience of impressionable minds. The result is generation after generation of blue voters.

Gabe Hanzeli
Gabe Hanzeli
1 year ago

of course biden is lying. biden lies about everything. I don;t think there is anyone who can claim that know of biden every saying more then 10 words without lying.

biden is the perfect democrat leaders. he exemplifies everything the democrats are. lying, cheating, corrupt, perverts with low IQ’s

The ticket to a middle-class life, now as ever, is finishing high school, working a full-time job, and getting married before you have kids. 

Roy Anthony
Roy Anthony
1 year ago

Based on what’s transpired, I think ALL persons of any color and creed who have repaid their college loans, no matter how many decades ago they were paid, should also get $10,000, plus accrued interest, from this new “program.” What about the poor electrician, plumbers, HVAC technicians, etc…even those who carry chemicals to treat your lawn who, themselves, paid to go to a trade school and obtain a trade license to get a job? Professional tractor-trailer truck drivers? Shouldn’t they get the $10,000? Some HVAC techs have to work in 110+/- Fahrenheit degree heat in some home attics which do not have proper ventilation. They should get more than the ten. With my rant here, I’ve already ruined my dinner.

Dennis Belotti
Dennis Belotti
1 year ago

How long will it take for the vast majority to wake up and realize that the Democrats are TRAITORS ?
Without major protests and possibly mass riots these subversive socialists will steam roll over all Americans….and don’t rely on the mid-term elections, the voting machines and the poll workers are still corrupt.
We are losing America thru complacency.

Michael Venaccio
Michael Venaccio
1 year ago

So..we all understand that what is attempting to be done may at the very least be illegal, since he cannot transfer debt from one group to another unless congress allows it.

That being said, what of the thousands of conservative organizations that have no trouble asking me for $$$$ on a daily basis going to file the applicable federal lawsuits?? May as well put my contributions to work.

The all should consolidate, think of all the money that would be saved in general and administrative costs and could be used for lawsuits, contributions to conservative candidates, etc.

Seems that all these organizations are great at offering well thought out opinions-that most of us reading agree with anyway-are happy with the way things are as they can use the situation to raise money.

DO SOMETHING…NO MORE TALK, how about some suggestions.

Greg
Greg
1 year ago

When the federal government decided to take over the student loan program, it was with the caveat that the federal government would make $6 per $100 (6%) on said loans. The government is SO inept and deceitful that they LOSE $8.10 / $100. And people want them in charge of everything! I want them in charge of very, very little.

Nick Murphy
Nick Murphy
1 year ago

Amtrak lost money charging $25 for a hamburger 5 years ago

Nick Murphy
Nick Murphy
1 year ago

Just apply my foolproof Democrat lie detector. If their lips are moving they are lying guaranteed

P2burner
P2burner
1 year ago

I believe that, soon, half of the gender studies grads will be on food stamps and the the other half will be at trade school learning a valuable skill, like plumber or electrician (if they are willing to work at all, that is)

Michael Lewis
Michael Lewis
1 year ago

The root of problem with the 2008 housing bubble and student loan forgiveness is the lack of a negative feedback loop to stop future economic disasters. Government failures created both problems. Government is not the solution it is the problem. A bunch of weekend warriors who get paid more than the flyover people who have to live on a budget and cannot print unlimited money to handle shortfalls!

There are three branches of government. Why hasn’t Congress stood up to Biden and reminded him all expenditures of public money must begin in the people’s house. Biden is stepping on the authority of the legislative branch. Why don’t Republican Congressmen put on their big boy pants and instruct the Executive to restrict his machinations to the authority granted his branch and office.

Gerald
Gerald
1 year ago

re: middle class life: there are FIVE requirements for this. They are:
Yes, finish high school
Yes, get a full time job (and don’t quit till you have another job
Yes, don’t have children out of wedlock
And, don’t consume addictive substances, or engage in addictive activities.
And, don’t engage in illegal activities.

MariaRose
MariaRose
1 year ago

My biggest peeve is this “forgiveness of the loans” will become a need to redo every year and no one is held responsible but us taxpayers for the cost. I don’t know about anyone else, but I am tired of paying taxes (more than I need to) so that others don’t have to learn how to be financially stable and self-sufficient. They are encouraging dependency on government handouts as a way of life so they can control the mob. Well, since I get no government handout that relieves me of tax liability, I am not happy to pay the debt of someone who didn’t even read the fine print when they got those loans from those name-brand colleges and have no jobs in their ‘dream’ worlds. Life has consequences for living it.

Willie
Willie
1 year ago

Government is to big and Biden has not told the truth once about anything.Biden is so evil the truth ant in him.

Enuf Said
Enuf Said
1 year ago

It amazes me that people STILL listen to anything Biden says. If you want to be lied to–go to the bank-get twenty $5 bills and spend it at the strip club. You will hear MORE truth there than Biden has EVER uttered.

Hal
Hal
1 year ago

I fear that the true target of student loans is not clearly identified. It is the educational top tier of the educational system that is profiting from Federal Student loans. It is one of lassos the rustler DemocRats throw at the taxpayers that deceives the clever way the DemocRat Party attempts to lock-in the support of high-level Academia intake of loan money! Yes … many students benefit from the loans, but it is the Educational Institutions that stuff their pockets … they get their money for sure, and the taxpayers have to cover shortages of payment by students.

Jake
Jake
1 year ago

How about – Reduce the salaries of the professors and other high level staff at the colleges/universities, and then take those $$$ and start paying the loans off! They are the ones that benefitted from the government-taxpayer funded loans, so let them feel the pain of paying them off! Yes. I know that is just a drop in the lake of debt, but it would make me feel better. The folks with the loans signed the paperwork for the loans, so ultimately, they MUST pay them off themselves.

Robin Boyd
Robin Boyd
1 year ago

Government intervention into our social lives is always a disaster for citizens. Progressives in government want as many as possible to attend college indoctrination into Socialism. Taxpayers pay to undermine society into Socialism.

Moses
Moses
1 year ago

Like the accountant told me in 1975, if the gov’t. made beer it would cost $50. a six pack and they would still be losing money. I added later, and it would taste bad. Why democrats think it is a good idea to have the gov’t. in charge of anything is beyond me.

Rich
Rich
1 year ago

So what if the debt goes up another 4-500 billion (some estimates are at 1 trillion), it’s only tax payers money! We can ALL pay for what those who borrowed the money promised to repay. Let the future generations try and figure it out. THIS is responsible government that is bringing us closer together! So how’s the communist administration treat’n ya’ now? Want more of the same, just vote socialist/Marxist/communist democrat in November.

Dr Dave
Dr Dave
1 year ago

I fully agree with all 3 of your descriptions of Biden lies. I almost started my comment by saying that Biden lying is not news – it’s standard operating procedure (SOP).

Hal
Hal
1 year ago

Let’s be sure we understand who benefits from the Student Loans and who pays for it. No matter who pays for it, the Collegiate level Education Schools (and their staffs) get the money. They are the major beneficiaries of the Student Loan Programs. Most of the barrowing students get the educational skills, but the Institutions get all the money in the end… and thus, are being the true gainers of the Student Loan Program. The losers financially are not just the tax paying public, but mostly all American citizens (by a combination of “inflation” and “direct taxation”).

johnh
johnh
1 year ago

My Opinion: A college degree is only a stepping stone to get a job when you graduate & is not an automatic step to riches. Have read that only 40% of people that start college end up graduating. And there are many jobs that people can work without going to college degree. Having said that, I still feel a high school education is the most important thing for our youth.

PapaGrouch
PapaGrouch
1 year ago

Only three…?

Marie Langley
Marie Langley
1 year ago

Is anyone surprised by these lies? Everything that comes out of his mouth is a lie. The American people should know this by now. I think he actually believes his own lies as well.
LET’S GO BRANDON!!!!!!!!!

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