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Bruce Bialosky

Giving Our Money Away Again

President Biden thinks his real title is “Spender in Chief,” not Commander in Chief. He is always throwing our money around. It seems every answer he provides has him committing our money without any clear explanation of his authority. His recent failings have caused him to refocus his efforts on a new, but recurring subject – student loans.

Biden is not the only one who wants to spend wildly. He has gotten immense pressure from his party (particularly the Left). Now that the Build Back Better boondoggle has tanked, the Left and other Democrats feel compelled to spend money somehow. They want to relieve the debt from student loans, and they are using the pandemic as a front for their battle on the issue.

Student loan repayments have again been deferred until August 1, 2022, with no interest accruing during the deferred period. Biden had said the deferral to February 1, 2022, would be it, but that did not hold for long. This is the sixth time the repayments have been deferred during the pandemic with zero evidence that the people who owe the loans are not capable of repayment.

The drumbeat for relief rolls on. Katrina vanden Heuvel who writes for the Washington Post and is a darling of the Left wrote “But the move also raises the question: Why restart payments at all?” She states, “89 percent of borrowers reported they are not ‘financially secure’ enough to resume payments.” That is some new financial standard that has been created. Loans used to be based on whether someone has the financial capability to repay the loan, not their state of mind.

There is extensive duplicity being displayed by the people favoring loan relief.

While people argue to eliminate college loan debt, they likewise encourage people to attend college. They tell young adults how much more they are going to make than with only a high school degree. If you get a bachelor’s degree, it is estimated you will make on average 75% more over your lifetime — or roughly $1.2 million. Those with a master’s degree will earn an additional $400,000 above a bachelor’s degree and it gets even better for a Ph.D. who will earn $1.2 million more than a bachelor’s degree. Coming in at the top is a professional degree which will earn a stunning $1.9 million more over their careers than having a bachelor’s degree.

That begs the question: Why would we let any of these people off the hook for their student loans? It seems like people are making a conscious investment in their future. A lot are obtaining their degrees or advanced degrees with the idea they will make more money, and statistics proves that out.

My favorite Senator, Lizzie Warren, sponsored a resolution with Majority Leader Schumer and Rep. Ayanna Pressley (D-Mass and Squad member) urging Biden to cancel up to $50,000 of student loan debt which supposedly would relieve 36 million people from their loans. This equates to $1.8 trillion. There is no mention President Biden’s “authority” to cancel any student debt in the resolution. Once again Congress is shirking its own responsibility by not passing their own bill. Me thinks the reason they sponsored the resolution is because they could not get a bill through Congress.

None of these proposals are accompanied with any procedures to change the accumulation of this debt in the future. As has been previously discussed in this column, colleges shovel these loans out to students with one concern – feeding the colleges’ coffers to pay the fat salaries of their overstuffed staffs. There is no counseling by perhaps asking someone if it might be a bit nuts to get a master’s degree in sociology with no prospects for a job when you graduate that will allow you to repay the $150,000 you borrowed. There is no explanation that once you graduate from college with your $75,000 debt you will have to start making payments of $600 per month and how long it will take to pay off your debt. There is no mention of the fact that 40% of people with college degrees are working in positions that don’t require having a college degree.

There are three major objections to these proposals:

1. What about parents who went into debt to make sure their child doesn’t acquire these student loans? Or how about the many people who have paid back their student loans? Or the 70% of Americans who do not attend college who will be saddled with this debt.

2. These college graduates earn more than high school graduates. They made investments in their futures so why should they be relieved of their investment obligations?

3. If we relieve these debts, if we piled that $1.8 trillion or more onto the national debt, what are we doing to stop the same situation from reoccurring ten years from now? We are doing nothing at present. We are not requiring these universities to be more financially responsible as evidenced by them loading up on average 45 staff for DEI. We are not requiring outside people to advise these students of the risks involved in taking on these loans.

This is a manufactured crisis to continue to feather the beds of a major constituency of the Left – university personnel. We are looking at relieving debts for people who by definition are the less needy of Americans. Relieving this debt will do nothing but put our national government in a bigger hole of which it cannot dig itself out. It is feathering the nest of special interest groups to get them to vote for Democrats for the remainder of their lifetimes. It is inherently un-American for someone to shift their debt onto the backs of other Americans when they are capable of repayment.
Call me when the problem has been fixed going forward by taming costs and properly educating borrowers by a disinterested third party. Until then this is the ultimate boondoggle.