The Unethical Student Loan Debt Cancellation Ploy

The push to cancel student loan debt is another example of the Left embracing a terrible, foolish, indefensibly unethical policy for no better reason than hope that it will allow them it to gain political power. Word around Washington is that President Biden is “seriously considering” canceling up to $50,000 in student debt for all. Translation: Biden’s puppeteers/handlers/advisers are probably trying to get him to do it, insane and irresponsible as it may be, but Joe may be inclined to do it on his own, because 1) he’s just not very bright; 2) he’s not very bright and his cognitive functions have been deteriorating in front of the whole nation; and 3) he never had any integrity anyway.

The late Rush Limbaugh, commenting on Mitt Romney’s loss to Barack Obama in 2012, lamented that “You can’t beat free stuff!” He said that Democrats were always willing to buy votes by promising to pay for more or making “the rich” or private business do so, from living wages for jobs not worth them, to national health, to free college degrees and more. Tilting the U.S. to socialism and a “nanny state”? If that’s what it takes to win, sure! Turning the national debt into a ticking time bomb that future generations will have to suffer for? Why not? Student loan forgiveness is as good an example of Rush’s point as I can imagine.

It is unethical in so many ways…

1. For Biden to unilaterally cancel the debt is probably illegal. Congress appropriated funds for student loans with the expectation that those loans would be repaid except in very limited and specific circumstances, such as borrower defense to repayment. Those specific circumstances were listed by Congress, and the President cannot unilaterally over-rule them.

2. As usual when the law and the constitution are obstacle, Democrats are arguing that the law should be ignored anyway. Dalié Jiménez, director of the Student Loan Law Initiative at the University of California, Irvine and an advocate for cancelling the debt, was frank, saying, “People who don’t want to do this, they don’t want to do it for policy reasons. The law is an excuse.” Think about the reasoning behind that statement.

Here’s another brilliant legal analysis by a Democratic leader. Representative James Clyburn of South Carolina, the third-ranking House Democrat, said, “He’s got lawyers telling him he shouldn’t [but] If executive orders can free slaves and integrate the armed services, it can eliminate debt.” Clyburn definitely isn’t a lawyer, and though his degree was in history, he isn’t much of a history student either. To say those two examples (by Lincoln during the Civil War, when he didn’t free the North’s slaves, and Truman during WWII) are precedents or even relevant shows how astute (or honest) our leaders tend to be.

3. My guess is that the Democrats are pretty sure that cancelling the debt without Congress’s formal approval (which won’t happen because of the balance of the parties) is illegal, but will do it anyway, hoping to paint the opposition as heartless and use it as a wedge issue in November.

4. During his 202 campaign, Biden promised to end student loan debt, a “promise them anything” tactic he took from Elizabeth Warren, the most unscrupulous and dishonest of his Democratic Presidential Primary opponents. “I’m going to make sure that everybody in this generation gets $10,000 knocked off of their student debt as we try to get out of this God-awful pandemic,” he told an audience in Miami. It was widely panned as irresponsible then, but nobody paid much attention because all they cared about was demonizing Donald Trump.

5. When Biden made that promise, the US wasn’t in the midst of its worst inflation in half a century, and he hadn’t cheerily exploded the national debt. Forgiving $10,000 per borrower would require the government to write off $321 billion in loans, according to an analysis released by the Federal Reserve Bank of New York. Cancelling $50,000…well, just multiply by five.

A trillion here, a trillion there: hey, it’s just money!

6. The #1 ethics issue: Why should the students or their families who worked and sacrificed to pay back their loans and meet their obligations be treated like suckers? What will that do to future government loan programs? In what Bizarro World are deadbeats rewarded and responsible borrowers punished?

7. Why should the students and families who can afford to pay back their loans get a break? Well….

8. The likely justification for the loan forgiveness is likely to be based on race, the Democratic “Break Glass in Case Of Criticism” all-purpose fall-back plan. The now completely partisan ACLU provided the road map, arguing that “student debt is a racial justice issue,” because it is “a crushing burden that falls heaviest on Black communities, and especially onto Black women.” Since any problem that disproportionately affects a particular racial group is now a racial justice issue and therefore, a civil liberties issue, opposing student loan forgiveness is….all together now…racist.

Joe also promised to heal racial divisiveness.

Prediction: President Biden will try it. Ethics don’t matter.

37 thoughts on “The Unethical Student Loan Debt Cancellation Ploy

  1. My son paid off his remaining student loan debt (undergrad & law school) within 3 years after joining his dad’s law practice, all before the “pause.” Our daughter’s student loan debt was affected by the “pause” about 2 years after she finished library school. The one good thing since then is that her loans have a new servicer (Navient always got things fouled up, including ignoring payment instructions, even after our Congressman intervened.). We’re waiting until the “pause” is over before making any further payments, though.

    • Navient misapplied my 150% overpayment, said I was late on my payments on one loan (while months ahead on another loan they administer), and even sent me a condescending email about it (We know it can be difficult keeping track of things, but let’s get back on track!). I called them, knowing full well I was not late, and have never been late, and got them to fix it. I then immediately refinanced using the Connecticut student loan program, because I was utterly sick of dealing with Navient. (Among other issues, their website hasn’t been updated since 2010 when it was still called Sallie Mae; Navient is garbage at every level!).

      I no sooner signed the contract refinancing my loans out the federal student loan system (and out of Navient’s slippery hands), that the Department of Education announces the interest freeze! So like a shmuck, I’ve been paying interest this whole time!

      On the plus side, my state hired a competent vendor to administer its student loan program; I haven’t had a single issue since switching.

    • I paid off my student loans in 4 years. I did this by paying every dime extra I could afford every month until the loans were gone. I paid all through the pause, and finished them off about a year ago. I did this….instead of buying a house. Once I had the student loans paid, then I started saving for a down payment. Now housing prices have skyrocketed, mortgage rates are skyrocketing, and the government is going to just erase everyone else’s student loans while I get screwed for being responsible?!?! There are no obscenities in the English language strong enough to express my rage on this topic. Responsibility is obviously overrated. An intelligent person would clearly focus on seeing how much money they can scam from the government rather than attempting to be a responsible person.

      • At least you’ll have an excellent credit rating (as my son does) for having paid off your student loans in full.

  2. You didn’t even touch on the part that makes my head explode:

    No one who wants to cancel student loan debt has even suggested pausing the issuing of new loans.

    I just can’t understand this. If student loans are this bad an idea, if they’re so predatory or a degree is so worthless that they can’t be repaid, why is no one suggesting we stop giving people more of them, right away?

    Are we going to excuse the loans people take out the day after the forgiveness, or do they have to pay them back? Obviously they’ve been warned…

    Or are we advertising that we’re giving out free money?

    They don’t even mention this aspect in most news articles. As the indebted college grads say, I literally can’t even.

      • I asked a friend who keeps posting about student-loan forgiveness about future loans going forward. He is usually willing to engage on political issues.

        Crickets….

  3. The U.S. is the only country in which students go this deeply into debt. Part of that is that whereas Germany, for example, doesn’t charge tuition at all (there’s a nominal administrative fee) even for foreign students, the American system charges a LOT. There has also been a huge change in the ratio of tuition and fees relative to wages. In 1977, the year I graduated from college, the average full cost of attendance (room, board, tuition and fees) was $2577 for in-state students at a 4-year public institution. Minimum wage was $2.65. So it would take about 972 hours of work at a minimum wage job to pay for a year of college. (I know, there are a lot of other figures to consider–scholarships, grants, cost of books, taxes, etc.–but go with me here.) Those figures are now $25,487 and $7.25, or about 3515 hours. A student who works 40 hours a week for 13 weeks over the summer and 10 hours a week for 30 weeks during the school year would work 820 hours. In 1977, that would pay about 84% of the cost of attendance; today, about 23%.
    So the system is very much stacked against today’s students in a way it wasn’t, even in the US, in my undergraduate days. That doesn’t mean today’s student should have their debts written off, but it does raise the question of compromise positions: repayment based on a percentage of post-graduation income, lowering or even eliminating the interest rate, etc. Recent students, even those with decent jobs, struggle to pay even the interest on student loans, making only minimal dents in the principal. They have a right to be upset with our generation, who got ours and then imposed ridiculous costs on younger generations,
    Wiping out student debt isn’t the answer, but the status quo is unethical at its core, and will have serious negative consequences in economic, political, social, and cultural terms if continued without some reasonable modifications.

    • Agree in all respects. The reason colleges charge so much is because of the availability of loans.

      “the status quo is unethical at its core, and will have serious negative consequences in economic, political, social, and cultural terms if continued without some reasonable modifications.”

      Bingo.

      • “The reason colleges charge so much is because of the availability of loans.”
        Well, that and the increased expectations–campus-wide wifi, roomier dorms with better amenities, computer centers, tutors, 24-hour library access, etc.–the proliferation of middle-management administrators, building projects built on the backs of students who will never use them, and the increased domination of athletics, which are net money-losers at all but a handful of universities.

        • Amen. Higher education has been hijacked for at least two generations by empire building administrators and faculty, aided and abetted by irresponsible trustees and state and federal officials.

          • Don’t forget Diversity, Equity, & Inclusion administrators. Ohio State University’s payroll for DEI is more than $13 million/year. That’s Ohio, not known for its left leaning population or high cost of living.
            I find it absurd that people go into debt for this. I didn’t go to college because I couldn’t afford to. Borrowing money never crossed my mind.

        • I think the increased expectations are downstream of the easily available money. Point a firehose of money at any institution, and you’ll be amazed how ways are invented of soaking it up.

    • Well, Curmie, can we start with the salaries of people like, oh, say, Lizzy Warren? Or the salaries of university presidents and administrators? Or athletic coaches and athletic directors? And “Development Department” staff? Or skip the climbing walls in college fitness centers? That’s where the problem lies: bloated beyond recognition college and university budgets and campuses built out to the specifications of Xanadu. It’s all ridiculous overhead. Why should the taxpayers be stuck with unwinding that mess that’s been in the making for the last fifty years? And forget about Germany. The confiscatory income tax rates borne in Europe would never, ever go over in the U.S. Whoever wants the U.S. to “be like Germany” is free to go to Germany. If they’ll let you in. They have a thingy called an immigration program.

      • Heck, let them try to get a driver’s license in Germany. That’ll send them screaming back to the USA faster than anything else.

        • As the young woman at the car rental counter in Frankfurt explained, almost apologetically, when asking for various documents when we rented a car, “Here in Germany, things are different.”

    • Are we ready to adopt European models of tests and competition for university slots and a limited selection of career paths that the government will finance?

    • First and foremost, I agree with you. Something must be done, it’s a bubble which must burst – and the sooner, the better, as things are not getting better any time soon. There are a lot of options between forgive everything and suck it up, buttercup, though. One of my favorites I’ve seen is just to change the interest rates to be down near or at 0. Bad enough that the loans are inescapable, but incentivising making profit off student debt is distasteful. And pausing the handing out of new debt until the mess is fixed!

    • Germany’s universities are not open to all. The German school system uses tracking to determine who will go in to university and who is destined for trade school. There is no such thing as community colleges in which highly marginal students can find a pathway to state universities. European schools also have a far different demographic that must be satisfied. Try pushing the idea that only the select few whose academic achievement in primary schools will be eligible for training to become a professional here in the US. If we were so inculturated, then Harvard would not having to defend its new progressive admission policies and high quality magnet high schools such as TJ in DC would not be forced to lower their admission criteria to ensure lesser qualified candidates got a “fair” shake.

  4. 6. 7. and 8. Why don’t students of color stop getting worthless degrees? When do I get reimbursed for paying cash for our son’s undergrad degree from ASU? When do I get reimbursed for paying off our daughter’s $60K in 1990 after tax dollars for her undergrad from Georgetown? When I do I get reimbursed for paying cash and loans for my law degree? When does my dad get repaid for paying cash (in 1970s dollars) for my undergrad degree? This is pure and simple wealth re-distribution where those without college degrees are being tapped to pay for the college degrees of others. This is really third world stuff. I suspect the program will be administered such that you will receive the note marked paid in full upon turning in your straight-line Democrat party ballot to a precinct worker or the local Democrat party boss. This is the equivalent of Mexican voting where, upon turning in the vote for PRI. you receive a certificate entitling you to a new washing machine from the local appliance store. I’ve recently seen the Biden administration described as Obama’s third term, which seems pretty darned accurate. And on the racial front, this is really nasty. Clyburn is saying black people can’t run their own finances. The government has to bail them out of any and all debt because, by golly, they’re just so damned shiftless. Don’t make me get that worthless college degree, devil! You go, Jim. You da man. Now, about that car loan of mine…

  5. Not the Babylon Bee:

    Biden to Forgive $238 Million in Cosmetology School Student Loans

    The Education Department said Thursday that it will cancel the loans of 28,000 student borrowers who attended a now-defunct for-profit chain of cosmetology schools, the latest move by the Biden administration to address the politically charged issue of student-debt forgiveness.

    Borrowers who attended the Marinello Schools of Beauty between 2009 and its closure in 2016 are eligible for relief, which amounts to $238 million. The federal government previously determined that Marinello had “engaged in pervasive and widespread misconduct that negatively affected all borrowers” enrolled during that period—among other things, that it had “failed to train students in key elements of a cosmetology program, such as how to cut hair.”

    Some Marinello loans have already been forgiven, but Thursday’s action is a broad group discharge for anyone who went to the school during that period, even those who haven’t applied for relief. It is the first such group loan forgiveness since the Obama administration…

    https://www.wsj.com/articles/biden-to-forgive-238-million-in-cosmetology-school-student-loans-11651140001?st=ridq8us0nqqiplt&reflink=desktopwebshare_permalink

    • I believe that comes from the fact that these trade schools sign students up, get tons of student loan money and close up shop, leaving students without a degree and a lot of student loan debt.

      Maybe the solution to all of this is: If you want to borrow money to go to college, you should show us you are studying a worthwhile, money-earning degree, and not borrowing $200,000 for a degree in African American Studies, Gender Studies, social work, or some other useless degree.

      jvb

      • Removing the government guarantee behind student loans would solve this and many associated problems.

        If student loans, like other loans, could be discharged through bankruptcy, lenders would still write loans for college tuition – but only to students who are likely to be able to repay the loans. That means no loans for useless degrees or bad students. They’d also be less likely to loan you the full tuition amount, preferring you to have some kind of “down payment” skin in the game. This would provide pressure on schools to reduce tuition to attract students, who would now have more incentive up front to consider the cost of college and shop around accordingly. A lot more kids would get skilled trade jobs that they’re actually suited for (and which society actually needs to function) rather than waste tens of thousands of dollars getting a useless degree or dropping out of college in their Junior year.

        The only way I could be convinced to support student debt cancelation is if it included an ironclad 100-year moratorium on government-backed student lending. If these loans are so injurious that we have to bail these dipshits out, why would we allow this process to continue?

  6. This is nothing more than a “Hail Mary” by the Administration…an attempt to snatch victory from what it believes will be a November blowout.

    Regardless of shallow “Ocasio-Cortez”-style thinking, cancelling the debt doesn’t make it disappear. That money was spent by the government and given to students with the idea that it would be paid back…with interest. That money still has to be paid back. That means an awful lot of people that either paid their loans (or helped pay their kids’ loans) will now be on the hook (through taxes) for the loans of other people. And those that believe they are getting their loans paid off…?…well, guess what? You didn’t. It was just transferred from “the loan” you pay to “the tax” will now pay. People with loans need to realize they’re probably money ahead to simply pay off their own debt rather than let the government transfer it to a tax that they will pay the rest of their lives.

    We have a small student loan that we used to help our son through undergrad. We owe maybe two more years – and are planning to pay it in full the end of this year – and have already decided we will never…NEVER…allow the government to cancel or forgive it. It it not the rest of the country’s responsibility to pay for our obligation.

    College has become far too expensive for its worth…I’ll grant that argument. But too many Americans have become financial pussies…unwilling to stand responsible for their debts and almost expectant that they should receive everything for nothing.

  7. This is strategic because it is women and minorities that have difficulty paying off student loans. It is often pointed out that 2/3 of student loan debt is held by women, but it isn’t pointed out that women are 60% of the college students. Women and men take out about the same amount of student loans, but men are more successful in paying them back.
    Surveys find that:
    Men are more interested in making money with their degree than women.

    Women consistently gravitate to degrees with low earning potential.

    Women are MUCH more likely to go to for-profit colleges that offer convenient classes, but often less valuable programs.

    Women have trouble paying back student loans because they gravitate to lower-paying jobs. Many sites will state that this is because of discrimination, but that is really hard to justify. Let’s look at mechanical enigneering.

    Women are about 20% of the graduates, but only 9-10% of the workforce. This is because women leave engineering at a much higher rate than men. The average salary for a mechanical engineer is $78,000 for a 35 year old female engineer (with about 12 years of experience) and $77,000 for a 42 year old male engineer (with about 20 years of experience), so there is definitely a gender pay gap. Men need to be paid more. About 30% of female engineers leave within 5 years and less than 30% are left after 20 years. I have seen figures that state that the women have an average engineering career of 7 years and men’s is over 20 years. Women leave engineering based to their level of self-efficacy, interaction with their manager, interaction with their co-workers, their feelings of worth in the company, and the pay. None of these factors has any impact on male engineers remaining in engineering. Also, the racial pay breakdown for mechanical engineers is hispanic>asian>black>white.

    If we want to stop the problem with student loan debt, we need to stop letting people take out loans for degrees that won’t make them enough money to pay them back. Looking at the data for mechanical engineers, we also shouldn’t be pushing women into degrees they aren’t interested in. A government study found that about 30% of female engineering graduates never work in engineering because they aren’t interested in engineering. Women leave engineering at high rates because it isn’t as important to them as many other things and men stay in engineering because it is more important than almost anything else.

  8. I’m surprised no one brought it up, but another reason that the government handling student loan debt would be unethical is that by and large, it’s welfare for the wealthy.

    The single largest determinating factor for future earnings is still education. Period. End of sentence. The average earnings for people that graduated from high school but did not proceed to post-secondary education is $712 a week or $37,024 a year. The average income for someone with a bachelor’s degree is $1,173 or $60,996. Do the math. Ten years after graduation, the degree-holder has made a quarter million dollars more than the high school graduate.

    https://www.indeed.com/career-advice/pay-salary/average-salary-with-college-degree-vs-without

    Regardless of whether or not the people we’re talking about are wealthy now, they generally will be in short order, so student loan forgiveness in essence takes money away from the entire tax base so that the top quartile can self-actualize sooner.

    The practice should be at odds with progressive ideology, but they’ll never let ideology get in the way of the cause du jour, especially if it means trying to buy the votes from people who are already predisposed to vote for them with someone else’s money.

      • Not to put too fine a point on it, but… Bullshit.

        First, None of that actually interacts with what I said. I reject the premise, but it doesn’t matter if the correlation between wealth and education is a non-causative correlation, because the correlation still exists, and student debt forgiveness would still be a transfer of 1.3 trillion dollars from the entire tax base to the top quartile of income earners. You can’t get past that.

        But more, Reynold’s “law”, which you will never find anywhere other than the AEI, is that you can’t create a middle class by subsidizing middle class activities. That “middle class” is more than just the accumulation of status marks and instead we should look at how those markers are accumulated. I find it cute, and a great example of the kind of out-of-touch, myopic, narrative driven approach to economics that drove away an entire generation of young people from right of center politics.

        You can look at Reynold’s idea as a different way of looking at poverty, because he’s right in that merely giving lottery winners their winnings has a horrible track record of ending in destitution, but taking him literally and pretending that there aren’t economic benefits to a degree or home ownership is stupid to the point of being offensive. That entire argument is blown out of the water just by mentioning that the homeowner’s mortgage interest tax deduction exists.

        Try engaging in law, pharmacy, or medicine without a degree and get back to me with how you made out. I’ll accept the charges.

        • You are correct, Reynold’s law as stated is wrong to dismiss the value of the degree entirely. You are also correct that student loan forgiveness is very much a benefit to wealthy people. However, I still believe it’s mostly a selection filter rather than a determining factor. Most of the successful non-degree holders that I know would have been able to do quite well in college as well.

          My personal experience with college in the USA (BS math,MS computer science) is that they both contribute to success for people who can benefit from them, and act as markers for hireable employees. Most, but not all, of my education was useless. The graduate degree, since I chose computer science, was much better than the undergrad in mathematics. Almost none of it is actually useful in my job. The degree did work in place of a certification, and indicated someone able to jump through hoops and learn as needed, but that is credentialism rather than a direct benefit. I.E. it’s useful only because employers look for it.

          Some of this may be a matter of going to a local college, with a huge number of general education requirements. I am also not really a great example, and may have fallen for a typical mind fallacy. I believe the school systems push college as THE route to success far more than they should.

  9. A mean, sick little part of me kind of wants to see them do this. It would be the final brick in the wall that would close off a very large part of working-class voters to the Democratic party for a long, long time. They’re already fleeing the party in droves over cultural and economic issues, but to tell the guy changing brake pads at the service center and the gal processing chickens at the Tyson plant that they have to pony up to pay off the student loans their dentist’s kid ran up for a degree in Lesbian History? That’s not a straw breaking the camel’s back, that’s two whole other camels being dropped from a ten-story height onto the camel’s back.

    It’s a politically foolish move long-term. You might get some votes from the people you bribed, but how long before their enthusiasm wanes into “what have you done for me lately?” once the immediacy of the financial benefit wears off?
    Meanwhile, the people who get fucked by such a deal are far more numerous and much more likely to hold a grudge for many, many election cycles…

  10. If current outstanding student loans are forgiven, the government should go back at least 30 years and reimburse those who have in fact paid back their loans. True, a 20-30-year-old college degree is probably worth ten times what a meaningless degree means today, but someone needs to explain why the cut-off is NOW, and not inclusive of previous loans. When more than a trillion dollars will be lost with student loan forgiveness in an already strapped economy, some rationale other than vote-buying must be presented. Otherwise, if you forgive current loans for spurious reasons, you must go back and reimburse those who were honest enough or silly enough or stupid enough to take their loans seriously and pay them back. If the loans become freebies now, then the entire system needs to be changed (a la Germany, tho a terrible choice) and previous victims of this ‘unfair’ loan program should be compensated for being ‘victims’ of this basically racist program. Call it reparations! A college loan ‘reparations program’ could be the logical extension of most of the current arguments in favor of current loan forgiveness. And who knows, perhaps someone will decide that mortgages are also basically racist, so we’ll all be forgiven those loans as well…

  11. Jack, I attempted to post a response in this thread earlier today, but I think spam ate it. If you’re able to retrieve, that would be great, even though I think what I wrote has probably been well-covered.

    Thanks!

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s

This site uses Akismet to reduce spam. Learn how your comment data is processed.