I know this was a selling point to a lot of Biden voters. College debt is out of control, but Democrats want all of us to subsidize well-to-do families’ venture in sending their kids to college. For those who just paid off their loans, you’re screwed. You get no relief. For the 65+ percent of American families who don’t or cannot send their kids to college, well, you’re screwed even more; you must pay for the bailout. We must pay for the bailout. Does that sound like laying the groundwork for Trump 2.0 via a massive populist backlash? Sure does; Noah Rothman made that point when he shredded Liz Warren’s shoddy college plan. Not everyone has to go to college and the loans are voluntary. As Nick Gillespie noted for Reason, bailouts are always a bad idea.
Well, Biden isn’t going gung-ho on student loans at all. He can’t. The Democrats’ majority is simply too small, and he cannot rock the boat too much. That probably brings zero comfort to millions of Americans who were hoping for a bailout. Tough luck. You have to start paying off your loans again this year (via Bloomberg):
For millions of Americans, there’s an unwelcome side of the return to business-as-usual after the pandemic: They’ll have to start repaying their student loans again.
More than 40 million holders of federal loans are due to start making monthly instalments again on Oct. 1, when the freeze imposed as part of Covid-19 relief measures is due to run out. It covered payments worth about $7 billion a month, the Federal Reserve Bank of New York estimated. Their resumption will eat a chunk out of household budgets, in a potential drag on the consumer recovery.
Americans now owe about $1.7 trillion of student debt, more than twice the size of their credit-card liabilities. Politicians recognize it’s not sustainable. Yet for all the talk of loan forgiveness during last year’s election campaign — including from President Joe Biden, who promised to write off at least $10,000 per borrower — there’s been no progress toward shrinking the pile.
There’s going to be a tantrum over this and the usual suspects, like Warren, will probably make their case, but no one really cares. If you see whose debt, you’re paying off, the white college liberal who peddles critical race theory, that’s bound to create more issues with voters. Talk about subsiding the poisoning of your own well. Even hardcore Democrats like James Carville noted last year why this is a dumb idea.
“Democrats talking about free college tuition or debt forgiveness. I’m not here to debate the idea. What I can tell you is that people all over this country worked their way through school, sent their kids to school, paid off student loans. They don’t want to hear this s**t,” he said in an interview with Vox. “And you saw Warren confronted by an angry voter over this. It’s just not a winning message.”
Additionally, the Senate blockages make Biden’s unwillingness to act on student loan debt- something he can do *without* Congress but hasn’t yet- all the more glaring.#CancelStudentDebt is 1 of the few, rare opportunities Biden has to go big w/o the Senate. He needs to take it.
— Alexandria Ocasio-Cortez (@AOC) June 9, 2021
Canceling $50,000 in student loan debt would be one of the most effective executive actions that President Biden could take to provide a massive stimulus for our economy and help close the racial wealth gap. Let’s do this. #CancelStudentDebt https://t.co/CeBImgJbOn
— Elizabeth Warren (@SenWarren) June 7, 2021
Maybe that’s why Joe Biden is also avoiding this debate, or he simply forgot after his afternoon nap.
— Biden Voters Posting Their L’s Online (@BidenLs) June 8, 2021