American Presidents may not like Supreme Court decisions, but most since Andrew Jackson haven’t bragged about defying its rulings. Not even Donald Trump. Then there’s President Biden, who, while canceling more student debt recently, boasted about ignoring the Supreme Court’s landmark 2023 ruling that his previous loan forgiveness plan was illegal.
Speaking in Culver City, Calif., on Wednesday, Feb. 21, Mr. Biden said his original plan to “provide millions of working families with debt relief for their college student debt” was derailed by “MAGA Republicans” and “special interests” who challenged the plan in court. “The Supreme Court blocked it,” Mr. Biden added, “but that didn’t stop me.” He apparently thinks defying the law is a virtue.
On Feb. 21, Mr. Biden wrote off another $1.2 billion in student-loan debt, bringing the total amount he has canceled to some $138 billion. That’s not as much as the $400 billion debt cancellation a 6-3 Supreme Court majority struck down last summer, but it’s still a handout to 3.9 million borrowers.
He’s not really cancelling anything because he’s transferring the debt from the borrowers it benefited to the taxpayers who will finance it with higher taxes or interest payments on the rising national debt.
Under his Saving on a Valuable Education (SAVE) plan, President Unstoppable is offering loan forgiveness through income-driven repayment plans. Borrowers used to be expected to pay 10% of the portion of their discretionary income that exceeds 150% of the federal poverty level ($22,590 for individuals) for 20 years after which their loans are forgiven. The Biden plan reduces the payments to 5% of their discretionary income above 225% of the poverty level.
The Education Department says borrowers will also be eligible for loan forgiveness if they are enrolled in the SAVE plan, have been making payments for 10 years, and had total original debt of less than $12,000. Those with larger loan amounts will also be eligible for forgiveness on a sliding scale.
Missouri had standing to challenge the first Biden loan forgiveness plan because its loan servicer would be adversely affected if borrowers stopped paying their loans. In overturning that Biden diktat, the Court said Mr. Biden had acted without proper Congressional authority and thus violated the Constitution’s separation of powers.
Mr. Biden’s method of loan forgiveness has changed, but the same legal principles apply. We hope states and other plaintiffs harmed by Mr. Biden’s debt transfer to taxpayers are already looking to sue.
Mr. Biden is boasting about his debt forgiveness because he is desperate to get young voters to support him again in November. His 2020 coalition is splintering, and younger voters aren’t thrilled with his leadership or the results of his economic policies. His debt forgiveness scheme is as flagrant a vote-buying ploy as we can remember.
But the costs are high, and they aren’t merely to the federal fisc. The forgiveness skews to upper-income borrowers who have attended college at the expense of those who don’t. It is grossly unfair.
It also punishes parents and students who have saved to pay for college without loans, or who sacrificed consumption after college to repay them. Mr. Biden’s scheme does nothing to reform student lending, so it increases the incentive for students to borrow more and colleges to raise tuition knowing all or nearly all will be forgiven eventually.
But worst of all is Mr. Biden’s blatant rejection of the law, even after the Supreme Court called him out. Is it any wonder that GOP voters don’t take Democratic alarms about losing democracy seriously? Mr. Biden doesn’t take his own warnings seriously.
The Wall Street Journal
