by Dr. Otto Hernandez
In July 2021, Nancy Pelosi lectured Americans on loan forgiveness, saying that “people think that the President of the United States has the power of debt forgiveness; he does not. He can postpone, he can delay, but he does not have that power. That has to be an act of Congress.”
Apparently, Pelosi now believes that something magical happened in the last 12 months to enable the president’s power in this regard, recently saying that “we didn’t know what - what authority the President had to do this. And now clearly, it seems he has the authority to do this...”
Clearly. So what wasn’t all that clear to Pelosi a year ago is crystal clear now. As happens often with Democrats, political expediency usurps the rule of law, the United States Constitution, or any other obstacle otherwise standing in the way of their self-serving agenda.
In this particular case, the Democrats are citing the 2003 Higher Education Relief Opportunities for Students Act (HEROES Act) which they said gives the President the authority to waive or modify student debt balances in connection with a national emergency. What’s the emergency, you ask? Well the COVID-19 pandemic of course. Never mind that the pandemic has, for all intents and purposes, moved on for quite some time now.
The legality of President Joe Biden’s loan “forgiveness” move is sure to be tested in the courts, so don’t go spending your $10,000 in government cheese just yet. But it will be tested in the court of public opinion for the months (and years) to come, and may in fact be tested in the upcoming mid-term elections this November.
Indeed, many see this as a naked, Hail Mary pass to pander for votes. Yet while some estimates have as many as 43 million people benefiting, the burden, estimated at $2,000 per taxpayer, will be borne by all 330 million U.S. citizens, now and in the future. It remains to be seen how successful the vote buying scheme will be.
Further, while beneficial to those with loan debt, this largesse is extremely unfair to the majority of Americans who chose not to attend college, who chose to attend college and worked diligently to pay off any debt incurred or those who made higher education choices based on affordability and worked their way through school as not to incur any debt at all.
It is also irresponsible and remarkably disrespectful to force the working class who did not attend college at all, to pay for the debts of college-educated Americans. Those folks who are working in the services or in a trade and are struggling with the current inflation largely created by the Democrats’ profligate spending, will now have to pay the college bills of, in theory, future doctors, lawyers or other professionals. Additionally, think of all the people who took out loans to start their own businesses. Where is the loan forgiveness for them? The immorality of this move is breathtaking.
Yet the real problem here has been completely ignored by Biden and his fellow Democrats.
According to educationdata.org, college tuitions have risen 179 percent during the last 20 years, far outpacing inflation over the same period. The federal government became a part of this problem a little over 10 years ago when it took the student loan programs away from the banks.
Colleges and universities recognized the revenue potential of the government guaranteeing the viability of the loans and accelerated the rise in tuitions exponentially. Indeed, the large ivy league and land grant universities now find themselves with multi-million dollar endowments on which they pay no taxes and with their presidents making CEO level salaries.
So we are left with a system whereby the colleges raise tuitions to exorbitant levels and the federal government lends the money with the hope that the borrower will repay it.
In fact, many fear that this unprecedented loan “forgiveness” will simply embolden the colleges and universities to continue to raise tuitions. Why wouldn’t they? Why would they kill the golden goose when their federal enabler continues to pump public money into their coffers? It is nothing short of a racket, folks, and We the People are now getting stuck with the tab.
In the meantime, these same colleges and universities are churning out graduates with degrees of such questionable value that the students cannot earn enough money to pay their debt. After all, Gender Studies majors are not qualified for the well-paying IT and cyber-security jobs that are plentiful in the marketplace.
Dr. Otto Hernandez is a political commentator and a lifelong educator.