President Joe Biden's student loan "forgiveness" measures are making matters worse for other taxpayers.
History has shown that attempts to "cure" a problem by exceeding the federal government's constitutional powers generally lead to more and worse problems. The courts, in the exercise of what is called "equity jurisdiction," have long excused borrowers from obligations incurred through fraud, duress and other forms of creditor unfairness.
In addition, federal bankruptcy laws – authorized in the Constitution by Article I, Section 8, Clause 4 – offer a path to safety for debtors who get in over their heads.
Biden's student loan forgiveness measures qualify as neither. Instead, they are classic examples of what Founding Father and former President James Madison called an "improper or wicked project." (Related: DEBT REVOLUTION? Tens of millions of student loan borrowers stage "massive student debt strike.")
Under the president's program, no debtor will have to declare bankruptcy. And far from being victims, they already have enjoyed the benefit of very favorable loan terms at taxpayer expense. The borrowers spent the money for what both they and the federal government thought was a good purpose.
Madison called debt cancellation "improper or wicked" for very good reasons: Cancellation does not abolish an obligation; it merely transfers it to innocent people.
Biden using debt cancellation to buy votes
In one of its latest announcements regarding student loan forgiveness, the Biden administration said it would forgive $1.2 billion in student debt for nearly 153,000 borrowers enrolled in its new repayment program, called the Saving on a Valuable Education, or SAVE plan.
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The relief will go to borrowers who have been in repayment for a decade or longer and originally took out $12,000 or less.
Borrowers usually get debt forgiveness under income-driven repayment plans, including SAVE, after 20 or 25 years of payments. But under the SAVE plan, those who borrowed less can get their debt canceled after just a decade.
In January, the Biden administration said it would soon start to forgive the debt of these borrowers who had signed up for its new plan.
"We are once again sending a clear message to borrowers who had low balances: if you've been paying for a decade, you've done your part, and you deserve relief," U.S. Secretary of Education Miguel Cardona said in a statement.
Eligible borrowers will begin receiving emails from Biden and do not need to take any further action to receive the relief, the U.S. Department of Education said.
After the Supreme Court blocked Biden's sweeping student loan forgiveness plan in June 2023, with the Supreme Court's conservative majority ruling that Biden didn't have the authority to cancel student debt for millions of Americans – his administration explored all of its existing authority to leave people with less education debt.
It has now canceled debt for almost 3.7 million borrowers, totaling $136 billion in relief.
Cancellation injures the capital markets. In other words, it makes creditors less likely to lend on favorable terms. This makes it harder for deserving people to borrow. Cancellation damages the sense of personal responsibility. It frays the social fabric by creating bitterness between different classes of people.
Rob Natelson, senior fellow in constitutional jurisprudence at the Independence Institute think tank in Denver, warned that Biden's debt relief program is part of a centuries-long tradition of "demagogues" using debt cancellation "to buy votes."
Watch this video that talks about Biden trying to get young voters "onboard" by cancelling student debt.
This video is from the NewsClips channel on Brighteon.com.
More related stories:
Dave Blaze calls for end to the STUDENT LOAN racket.
Homeowners with good credit being PUNISHED with Biden redistribution of high-risk loan costs.
Taxpayer money going down the drain: Biden circumvents SC decision, cancels $72M in student debt.
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