Throughout the 2020 Democratic primary elections, few policy ideas have received more attention and support from liberal voters than the so-called student debt relief.
Every Democrat seeking the party’s presidential nomination – including Joe Biden-Facilitated some form of student loan debt relief, from Biden’s $10,000 proposal to Bernie Sanders‘Call for cancellation of all debts.
However, President Biden and Congress Democratic Party So far, they have refused to make debt cancellation a priority, despite its popularity among left-leaning voters.
Some might try to blame the Democratic Party’s decision to avoid continuing to debate the issue on the unpopularity of debt cancellation among many key voter demographics. But in fact, the Democrats have found a way to completely bypass the back door of the debate to cancel student debt: simply refuse to let the borrower repay the loan.
Most of the student debt accumulated during the Obama and Trump administrations involved loans directly from the federal government. This is the main way college students pay for higher education today. Since the federal government controls many of these loans, it has the right to allow students to choose not to repay their debts. As part of Trump’s COVID-19 relief plan, the Department of Education exercised this power when President Trump took office.
Congress strengthened the Trump administration’s decision in the CARES Act, which is not only temporary Freeze federal student loan payments, But also reduced interest payments to zero and stopped the collection of default loans.
Initially, student debt payments should only be stopped for 60 days, but each time the deadline approaches, the payment freeze is extended. The most recent extension occurred in January, when Joe Biden postponed the deadline to September 30.
Most Americans with federal student loans have not been required to pay federal student loans for more than a year, even if they did not lose their jobs or suffered severe economic consequences due to the pandemic. Now, Democrats suggest that the deadline should be postponed again, this time to 2022.
On Wednesday, more than 60 Congressional Democrats, including Senate Majority leader Chuck Schumer (NY), sent a letter President Biden is required to continue to freeze debt payments for at least six months after the September deadline-if not very long, even longer.
The letter said: “We ask you to extend the suspension period for at least six months-until March 31, 2022-or until the economy reaches the pre-pandemic employment level, whichever is longer.”
The term “whichever is longer” is an extremely important part of Congressional Democratic requirements. After more than a year of COVID-19 lockdown, the economy is still weak, so it is impossible to say when employment will reach “pre-pandemic” levels.
Just before the start of the pandemic, the seasonally adjusted unemployment rate for January and February 2020 is 3.5%, which is the lowest unemployment rate recorded by the Bureau of Labor Statistics since then 1969It may take decades for the unemployment rate to return to “pre-pandemic” levels, while the labor force participation rate may no way recover completely.
The call for further freezing of student debt is not limited to Congress, anyone. In early June, the Minister of Education Miguel Cardona It was stated at the Senate committee hearing that the Biden administration is considering whether to issue another payment freeze extension.
It is not difficult to see how these so-called temporary suspensions of student loan payments have become permanent. The longer the student debt holder does not need to repay, the more politically difficult it will be for the Biden administration or the future Congress to restart repayment. For some borrowers, the monthly repayment amount exceeds $1,000.
The cancellation of student loan debt during the national debt crisis and rapid inflation is bad enough in itself, but doing so without the consent of the American people — they will be forced to pay in some way — is reckless and extremely unethical.
If taxpayers will be forced to pay for the university debt borne by others, the government can at least ask Congress to vote on the matter. Sadly, this seems increasingly unlikely to happen.
Justin Haskins He is a researcher at the Hartland Institute and the head of the Hartland Stop Socialism Project.
The views expressed in this article are those of the author.