Backdoor attempt by Democrats to pay off student loan debt

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In the 2020 Democratic primaries, few political ideas received more attention and support from liberal voters than the so-called student debt cancellation.

Every Democrat running for the presidency of his party, including Joe Biden– helped ease the burden of student loan debt, from Biden’s $ 10,000 proposal to Bernie Sanders‘Demanding full debt cancellation.

However, President Biden and members of Congress Democrats has so far refused to make debt cancellation a priority despite its popularity among left-wing voters.

Some may be tempted to write off the Democrats’ decision to avoid continuing the debate on the issue as the unpopularity of debt cancellation among many key demographic constituencies. But in reality, Democrats have found a back door to writing off student debt that completely bypasses the controversy: simply refusing borrowers to pay back their loans.

Most of the student debt accumulated under the Obama and Trump administrations comes from loans that came directly from the federal government. Today, college students mostly pay for higher education. Since the federal government controls many of these loans, it has the power to allow students to refuse to pay the debt. The Department of Education exercised this power during President Trump’s final year in office as part of Trump’s COVID-19 plan.

Congress has enshrined the Trump administration’s decision in the CARES Act, which is not only temporary. froze payments on federal student loanbut also lowered interest payments to zero and stopped collection of overdue loans.

Initially it was assumed that payments of student debt would only be suspended for 60 days, but the freeze on payments was extended every time the deadline was approaching. The last extension came in January, when Joe Biden pushed the September 30th deadline back.

Most Americans who received federal student loans, even if they did not lose their jobs or were not otherwise affected by the severe economic impact of the pandemic, were not required to make a federal student loan payment in more than a year. And now Democrats are proposing to move the deadline again, this time to 2022.

Senate Majority Leader Chuck Schumer
Senate Majority Leader Chuck Schumer, New York, speaks to reporters after a bipartisan group of senators and White House officials reached agreement on the Biden administration’s proposed infrastructure plan for the US Capitol on June 23, 2021 in Washington, DC. After initial negotiations between the White House and the Senate fell apart by Republicans, a new bipartisan group of senators banded together in hopes of reaching agreement on a much-needed infrastructure spending plan.
Samuel Corum / Getty Images

More than 60 Democrats in Congress on Wednesday, including Senate Majority leader Chuck Schumer (New York), sent letter asking President Biden to extend the debt payment freeze for at least another six months after the September deadline – if not much, then much longer.

“We ask you to extend the pause for at least six months – until March 31, 2022 – or until the economy reaches employment levels before the pandemic, whichever is longer,” the letter said.

The phrase “whichever is longer” is an extremely important part of the Democrats’ request in Congress. With the economy still limping after more than a year of COVID-19 isolation, it is impossible to tell when employment will reach “pre-pandemic” levels.

The seasonally adjusted unemployment rate in January and February 2020, just before the outbreak of the pandemic, stood at 3.5 percent – the lowest unemployment rate recorded by the Bureau of Labor Statistics since then. 1969 year… It will be decades before the unemployment rate returns to “pre-pandemic” levels, and the level of economic activity may never make a full recovery.

Calls for further student debt freeze are not limited to halls Congress, or. Earlier in June, the Minister of Education Miguel Cardona during the hearings in the Senate committee indicated that the Biden administration is considering extending the freeze on payments.

It’s not hard to see how this supposedly temporary suspension of student loan payments could become permanent. The longer the student debt holders are not required to repay it, the more politically difficult it will be for the Biden administration or future Congress to resume payments, which for some borrowers are more than $ 1,000 a month.

Canceling student loan debt in the midst of a sovereign debt crisis and a period of rapid inflation is bad enough in itself, but doing it without the consent of the American people, who will somehow have to pay the costs. – would be reckless and deeply immoral.

If taxpayers are forced to pay college debt bills incurred by others, the least the government can do is ask Congress to vote on the issue. Unfortunately, this seems unlikely.

Justin Haskins is a Research Fellow at the Heartland Institute and Director of the Stop Socialism Project in the Heartland.

The views expressed in this article are those of the writer himself.

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