The story of Robin Hood is one of the oldest tales still surviving in English history. Though he may be a total commie, it’s easy to see how many at least feel sympathetic towards the idea of stealing from the filthy rich, who would never notice if their pile of gold coins was drained a bit, and giving it to those who aren’t sure where their next meal is coming from. However, it’s nearly impossible to see how anyone could ever be on the side of a masked marauder who does the exact opposite: steals from the poor and gives to the rich. This just so happens to be the exact policy recently enacted by the Biden administration
On August 24th, President Biden announced a plan to provide $10,000 of student loan debt forgiveness to borrowers making less than $125,000 per year, and up to $20,000 of forgiveness for Pell Grant recipients. These loan forgiveness policies also apply to business and law school graduates, truly the lowest rung of the social and economic ladder.
As of 2021, 37.9 percent of US adults hold at least a bachelor’s degree, along with an additional 10.5 percent who hold an associate’s degree. These Americans, on average, earn a significantly higher income than those who only hold a high school diploma. The average 25 to 34-year-old with a bachelor’s makes $59,600 per year, the average associate’s degree holder brings in $44,100 annually, and those with a high school diploma make around $36,600 yearly.
These numbers make sense, after all, college is supposed to be an investment. The point of spending the money to earn a degree is to be able to earn a higher salary later down the road. Even if graduates initially start off their careers with debt, those with a bachelor’s degree can still expect to make nearly a million more over the course of their lives than those with only a high school diploma.
And, of course, the estimated $329 to $900 billion this plan will cost does not come from anywhere. This program will either be paid for by an increase in taxation, an increase in inflation, or most likely both. An analysis done by the Committee for a Responsible Federal Budget found that for every dollar spent on student loan forgiveness, only 2 to 27 cents of economic activity is created. This means an even larger increase to our already devastating inflation is coming. Biden’s bailout for the rich will hurt low-income families the most. To those with a fixed income, living paycheck to paycheck, an increase in taxes or a decrease in the buying power of their dollars can be particularly devastating.
People in lower income brackets need to allocate more towards housing, gasoline, groceries, and other necessities than those in higher income brackets. With less monetary wiggle-room, they feel every single change in the price of their daily needs. Not only is it unfair to bail out people who willingly took on loans themselves, but it is also completely unjust to then have the rest of America foot the bill.
Certainly, there are massive problems with our student loan system. College is way too expensive; today it costs over 180 percent more on average than it did in 1980, and the system as a whole is absolutely predatory. However, Biden’s plan will not fix either issue.
This plan is merely slapping a small bandage on a massive wound gushing blood. It won’t force college tuition down, and it won’t encourage people to be smarter about taking out massive loans from the government. If anything it will have the opposite effect.
“It is an important point to recognize that this program or programs like this do encourage in effect, more raising of tuition because you’re subsidizing the students, but other than the government coming in and somehow controlling college tuition … this is what happens,” says former top Obama economic advisor, Steven Rattner.
Something certainly must be done to remedy the incredible amount of debt that many Americans graduate with. However, paying off those debts, with the tax dollars of Americans who never went to college in the first place, who make less than the graduates themselves, is not the solution.
The views expressed in this article are the opinion of the author and do not necessarily reflect those of Lone Conservative staff.