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  • Writer's pictureJack Gerber

Why Biden's Student Loan Forgiveness is a Terrible Idea Pt. 2

Cover photo courtesy of Gage Skidmore on Wikimedia Commons

President Biden’s student loan forgiveness plan signed on Wednesday, August 24, will forgive $10,000 of student loan debt for those making under $125,000 per year (or $250,000 per couple). Most Americans will not receive benefits from this plan as those who worked hard to pay off their student loans, those who chose not to go to college, and those who have yet to take out student loans, as it will only further raise tuition costs and worsen the already runaway inflation. Instead of helping those that need it most, this “reverse Robinhood” plan is essentially giving welfare to the affluent being paid for by the less fortunate.


Ronald Reagan famously said that "The nine most terrifying words in the English language are: I'm from the Government, and I'm here to help," and this rings especially true in the case of the government attempting to assist college students. Like always, the government was trying to do the right thing by making college more affordable, but what we now know is that for every dollar given in government student aid, tuition increases by 60 cents (The Federal Reserve Bank of New York). Government involvement has drastically increased the price of a college education, and it shows no signs of stopping. This means that by the time many current high schoolers get to college, tuition will increase even more because of student debt forgiveness. According to Brian Riedl, a senior fellow in budget, tax, and economic policy at The Manhattan Institute, “Students will likely feel liberated to borrow more money on the assumption of future loan forgiveness, and universities will take advantage of the additional borrowing by raising tuition.” Instead of solving the student loan crisis, The Biden Administration’s student loan forgiveness plan will only be worsening it by causing colleges to raise tuition.


In Economics 101, students learn that inflation is the devaluing of currency and that the best way for the government to control it is by increasing taxes and decreasing government spending. When the government increases government spending during a period of high inflation, it must increase taxes even more to reduce inflation, or deal with even higher inflation. Right now, according to The Bureau of Labor Statistics, inflation is at 8.5%. To put it in perspective, each year the target for inflation is 2%, so our current inflation rate is astronomical in comparison. Current inflation is so high, that Congress recently passed the Inflation Reduction Act, a piece of legislation meant to combat inflation, but according to The Committee for a Responsible Federal Budget, “debt cancellation would boost near-term inflation far more than the IRA will lower it.” An increase in government spending is the exact opposite of what we need, as it will only significantly worsen our current predicament.


The famous economist Milton Friedman once said that “there’s no such thing as free lunch,” but we must realize that there is also no such thing as free college, as someone will always have to pay for it.



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3件のコメント


rbcacct53
rbcacct53
2022年11月17日

Jack Gerber, I am here to inform you that we should spread forgiveness not hold grudges, please change and grow as a person.

いいね!

ゲスト
2022年9月15日

You’re simply wrong!!!! l o l this is well deserved they have to get paid one way or another and if that means higher taxes so be it cry abt it!! EAT THE RICH!!

いいね!
Jack Gerber
Jack Gerber
2022年9月15日
返信先

Who exactly are the rich that you would like to consume? According to The National Taxpayers Union, the average American will pay more than $2,500 in taxes to help pay for these students' debts. Would you like to eat yourself? These debts aren't being forgiven, they are simply being passed on to you and others like you, while you receive no benefit.

While taxes will eventually have to be raised for everyone, including the poor, you are failing to take into account inflation, which hits the poor the hardest. Why should a couple making $249,000 per year have their student debt paid by the poor that are already struggling to pay for food?

Your position would be understandable if Biden…

いいね!
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