Footing the Bill?

Kali Jerrard

CounterCurrent: Week of 3/6/23

President Biden’s student debt forgiveness plan continues to shine under the media spotlight as the U.S. Supreme Court heard oral arguments challenging its legality last week. When the Biden administration announced its plan in August 2022, it elicited mixed reactions. For some, this was a welcome announcement of relief from crushing student loan debt. For others, it stirred resentment and concern over potential executive overreach. We understand the desire to be free of college debt, to preserve the proper constitutional separation of powers, and to not subsidize unjustly enriched colleges.

On February 28, 2023, arguments in the cases Biden v. Nebraska and Department of Education v. Brown were brought before the Court to determine if the Biden administration’s plan does, in fact, fall under the HEROES Act, and if it is legal.

In an article published today at the National Association of Scholars, Neetu Arnold and Teresa Manning recap last week’s oral arguments. Specifically, they discuss why the Biden administration’s plan is a “band-aid measure,” and, ultimately, unlawful overreach by the executive branch.

The Biden administration claims that its debt forgiveness plan falls under the HEROES Act, which was passed by Congress in 2003 (not to be confused with the COVID-era bill of the same name). George Leef, in an article for the James G. Martin Center for Academic Renewal, summarizes the precedent set by the HEROES Act and how the Biden administration uses it to justify its debt forgiveness plan:

That law was passed to allow the Secretary of Education to waive or modify student debts for service members or others suffering financial hardships “as a result of wars, military operations or national emergencies.” Biden’s legal team came up with the argument that, since the law pertained to “emergencies” and the Covid pandemic had been deemed an emergency, the president was acting within his authority.

For a quick refresher on the Biden administration’s student debt forgiveness plan, be sure to read “Passing the Check on Student Loans” by Marina Ziemnick.

Biden’s plan forgives student loan debt without seriously reforming the student loan program. It’s a win-win for students and institutions, but trouble for taxpayers: colleges and universities get to continue raising tuition each year while college debt gets wiped for existing borrowers. Future students will continue taking on irresponsible debt and will hold out for another debt holiday. The Biden plan does nothing to cure higher education’s financial woes, but rather places the burden upon taxpayers while pumping money to colleges—fueling tuition hikes and debt. As Arnold puts it

Blanket forgiveness is therefore bad policy; any relief must be tied to real, profound, and permanent reform. The American taxpayer should neither bail out nor continue to subsidize this sick system, enriching the higher education industrial complex while everyone else takes a hit.

The question remains: will the Biden administration prevail in forcing American taxpayers to foot the bill for higher ed’s poor finances? We’ll find out soon enough.

Until next week.

CounterCurrent is the National Association of Scholars’ weekly newsletter, written by the NAS Staff. To subscribe, update your email preferences here.

Photo by Towfiqu barbhuiya on Unsplash

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