President Joe Biden is making another attempt to provide relief to college graduates through a comprehensive plan to transfer debt. This is not the first time he has tried to win over a significant political group by utilizing taxpayer funds. It is also not the first time that state attorneys general from various states have taken action to prevent him from doing so.
The president is clearly concerned about losing support from younger voters, which is why he is making efforts to retain them. Biden’s strategy involves appealing to this demographic by implementing policies that would benefit them. However, this approach involves placing the burden on blue-collar workers who would ultimately have to bear the cost.
President Biden’s plan differs from former President Donald Trump’s approach of using a renegotiated trade deal to mitigate the expenses of the border wall. However, Biden’s plan does not prioritize the interests of American working-class taxpayers. Instead, it incentivizes individuals in the younger generation who have accumulated substantial debt without a clear strategy to repay it. This primarily benefits the over-educated, under-employed segment of the population.
Biden is optimistic about his gambit’s potential to bring him back to the White House. Nevertheless, a determined coalition of state attorneys general is steadfast in their mission to systematically dismantle Biden’s blue wall, just as they have done in the past.
They have the law and recent precedent on their side, but time is not in their favor.
In 2022, the president made an attempt to unilaterally cancel $430 billion in student loan debt. However, this action faced legal challenges as six states filed a lawsuit in federal court. With the support of public advocacy groups like the Foundation for Government Accountability, these states successfully thwarted the administration’s clear attempt to win over a crucial constituency.
The Supreme Court clearly stated that Biden’s scheme violated the Constitution. However, the administration was undeterred and, just two weeks later, introduced a seemingly repackaged version of the plan. This new program, called the SAVE Plan, aims to transfer student loan debt onto American taxpayers. Shockingly, it is estimated that this revised plan will cost Americans an additional $30 billion compared to Biden’s original student loan bailout.
The Secretary of Education’s authority to create income-driven repayment (IDR) plans for student borrowers is expanded unlawfully by the plan. Unlike home, auto, and business loans, IDR plans enable borrowers to repay their loans based on their income, rather than the amount of their debt and the duration of their repayment period.
Before the SAVE Plan, it is important to mention that Congress had already approved loan forgiveness through IDR programs. These regulations mandated that borrowers pay a minimum of 15% of their disposable income for a period of 20 or 25 years before being eligible for forgiveness of the remaining balance.
The problem lies in the fact that, despite its generosity, the current program fails to fully engage a crucial voting bloc for the Democratic Party. This is why the Biden administration is making efforts to reduce monthly payments (in some cases down to $0), provide assistance for those who cannot afford to pay the monthly interest charges, and even completely forgive loans for millions of individuals. To put it into perspective, the SAVE Plan permits borrowers to make no payments at all, with taxpayers taking on the responsibility of covering the accruing interest.
Those who decided not to pursue higher education or financed their own college education are bearing the brunt of this plan. They may have worked part-time jobs while studying, diligently saved to repay their loans after graduation, served in the military, or invested their resources in alternative ventures. Unfortunately, they are now obligated to support the choices made by others, without receiving any reciprocal benefits. This arrangement seems unfair to individuals who adhered to the established rules and were responsible for their own financial obligations.
Republican attorneys general are once again taking the lead in protecting taxpayers and upholding the Constitution. In March, Kansas Attorney General Kris Kobach, along with 10 other Republican attorneys general, filed a lawsuit in the 10th Circuit to halt the implementation of the SAVE Plan. Last month, Missouri Attorney General Andrew Bailey, together with six other Republican attorneys general, initiated a similar lawsuit in the Eighth Circuit. These legal actions highlight the commitment of Republican attorneys general to safeguarding the rights and interests of the American people.
If the courts do not intervene and stop this rebranded student loan bailout, we can anticipate a rise in consumer prices, increased tuition fees, more bailouts, and ultimately, a strengthening of the electoral support for Biden.
