Last Tuesday, the U.S. Supreme Court heard oral arguments in two challenges to the Biden administration’s student debt cancellation plan, which would forgive federal student loans for 40 million Americans at a cost of $430 billion. The Court is considering whether the administration has the authority to cancel the debt and whether it followed the proper rule-making process for setting up the program.
The Court cannot address another troubling issue in play, but it should be on the mind of every American struggling in today’s economy — the elitist redistribution of wealth inherent in President Biden’s program.
A recent study published by the Brookings Institution shows that enrollment in post-secondary education is significantly higher among students from wealthier families. Nine out of 10 high school freshman from families with incomes in the top 20 percent enrolled in higher education within 18 months of graduation — compared to just half of those in the bottom 20 percent.
In other words, the college-going population disproportionately consists of people from high-income families, despite decades of attempts to create equal access to higher education. Total debt amounts follow the same pattern. According to the Education Data Initiative, 65 percent of student loan debt is held by Americans with incomes higher than the national average. Just 12 percent of student debt is held by the poorest Americans. Any student debt forgiveness that happens today will largely go to the top half of society — at the expense of everyone else.
The White House website notes that federal aid has not kept pace with the rising cost of attending college and cites that as an argument for the new forgiveness program. But the program does nothing to rein in those costs or hold colleges accountable for the product they offer. Colleges are failing if their students can’t get a job that covers the cost of their college loans. What’s more, with retroactive and ever-increasing federal aid, which is part of President Biden’s overall plan, the customer is no longer the student but the government itself.
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