by Byron York
The 2020 Democratic presidential primary race was a bidding war in which the various candidates advocated spending trillions of dollars to enact sweeping progressive agendas. Some agendas were a bit more sweeping than others, but they all amounted to unprecedented increases in federal spending.
Take the issue of student loans. Bernie Sanders, the most progressive of the contenders, wanted to cancel all $1.6 trillion in student debt — just throw out all student loans for 40-plus million Americans and somehow make Wall Street pay for it. Elizabeth Warren pledged to forgive everyone’s student loans up to $50,000. And Joe Biden, the most cautious of the bunch, promised to “forgive a minimum of $10,000 per person of federal student loans.”
But here’s the thing: It didn’t happen, and yet no American with student loan debt has had to make a payment — any payment — for more than two years. It is all in the name of COVID relief. And it is still going on.
When Congress passed the first COVID relief bill, in March 2020, it paused student loan payments until September of that year. Then-President Donald Trump extended the pause until Dec. 31, 2020. Then the Trump administration extended it again, through the end of January 2021, by which time Joe Biden would be president.
Since then, even as he touted the improving economy — the job market is hot these days — Biden has extended the loan repayment pause time after time. On April 6, a couple of weeks ago, he did it again. “If loan payments were to resume on schedule in May,” Biden said in a statement, “analysis of recent data from the Federal Reserve suggests that millions of student loan borrowers would face significant economic hardship, and delinquencies and defaults could threaten Americans’ financial stability.”
So Biden extended the pause through Aug. 31, 2022. Now, here’s a question: Does anyone believe he will let payments resume at any point before this year’s midterm elections?
The same progressives who pushed for student loan forgiveness in the 2020 campaign are still pushing for it today. The problem is that they know they can’t pass such a measure through Congress. So they have been urging Biden to use his executive authority — in a way that would surely bring a constitutional challenge — to forgive student debt all by himself.
Meanwhile, the nation has a sort of backdoor loan forgiveness policy in place in the form of a continuously renewed moratorium on payments. Those 2020 Democratic campaign promises have (sort of) been kept — there will be no student loan repayments from the presidential election through the midterms.
And possibly even beyond that. Discussing the president’s extension on a Democratic podcast, White House spokeswoman Jen Psaki said, “Between now and Aug. 31, it’s either going to be extended or we’re going to make a decision.”
There’s no doubt why Biden is doing it. He has concerns about a president’s authority to just cancel student debt. But he has no problem extending the moratorium started by his predecessor. And if he extends it just a little longer, no one will be resuming loan payments right as the midterms arrive.
But what about the merits of all this? Biden’s handling of student debt is “galactically stupid,” in the words of Douglas Holtz-Eakin, a former head of the Congressional Budget Office. For several reasons. One, it’s “a misuse of pandemic emergency authorities,” Holtz-Eakin said, since it has “nothing to do with COVID-19.” Two, it’s “a misreading of the economy.” The job market is “incredibly tight,” giving workers a lot of flexibility. “If people who have gone to college cannot get a job and make loan payments now, what does it take to end the deferral?” asked Holtz-Eakin.
Third, it’s expensive and is “money spent with no return.” And finally, according to Holtz-Eakin, it is “throwing money at the affluent.” “It has been more than adequately documented that benefits of student loan deferral and forgiveness disproportionately accrue to the more affluent,” Holtz-Eakin wrote. “One can claim that they have ‘significant economic hardship,’ and that payment threatens ‘financial stability’ ” — two arguments from Biden’s April 6 statement – “but the facts don’t support it.”
But the politics do. And the Democrats’ political situation, with less than seven months to Election Day, is that the party is losing support among young voters. Democrats face the double problem of possible low turnout among young voters and still others abandoning the party — on top of the other groups leaving the party, too.
How to score points with them? How about canceling student loan debt? Or, failing that, extending the moratorium on having to pay off student loan debt? But even if Biden does not actually cancel debt, he can extend the payment moratorium as long as he wants — all the way to the 2024 presidential election, if it comes to that. The president and his party desperately need young voters, who probably won’t be interested enough to turn out this November. Look for him to do anything to get their attention.
