Biden plan to make college tuition even more expensive
Washington Examiner
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President Joe Biden’s student debt amnesty was a one-time giveaway of $400 billion to his most loyal voters. But regulations issued by the Department of Education last week, which fill in the details of his separate income-based repayment plan, could stick taxpayers with the bill for trillions in tuition payments for decades to come.
Unlike Biden’s attempted student debt amnesty, which has no legal basis at all, the Department of Education’s income-based repayment program was written into statute almost 30 years ago and designed to help only the lowest-income borrowers. Biden’s new regulations drastically expand the program to higher-income borrowers, driving up tuition prices for everyone and footing taxpayers with the bill.
WOKE MEDICAL SCHOOLS ARE A THREAT TO YOUR HEALTH
Specifically, Biden is raising the income threshold at which student borrowers are completely exempt from making payments from 150% of the federal poverty level to 225%. Furthermore, it lowers the percentage of income at which payments are capped above that level to 5% for undergraduate loans and 10% for graduate loans. If your new monthly payment doesn’t even cover the cost of the interest on your loan, then that interest is essentially being forgiven. Additionally, all loan amounts are completely canceled after 20 years for undergraduate degrees and after 25 years for graduate degrees.
These new rules create a perverse incentive for most college students to borrow the maximum possible amount from the federal government because, in many cases, it won’t have to be repaid. And don’t think for a second that colleges don’t know that the federal government is essentially making college free for those borrowers. As they have done for years, they are immediately going to jack up their prices again, this time to take advantage of Biden’s extraordinary generosity with taxpayers’ money.
As more and more colleges hike prices to suck up Biden’s higher education subsidy, more and more students who previously didn’t need federal help to afford higher education will now need that help in order to afford the higher prices caused by Biden’s expanded program. Just 20% of community college students need to borrow money to afford their education. But after colleges jack up their prices to take advantage of Biden’s bad policy, almost all of these students will need federal help.
Is it Biden’s goal to have more college students graduating with debt? Because that is exactly what his new policy will cause.
And just to add insult to injury, recall that Democrats federalized the student loan program — it used to be run by private servicers — specifically to turn it into a piggy bank to pay for former President Barack Obama’s Affordable Care Act. The profits from collecting student loan interest were supposed to fund Medicaid and health insurance subsidies for decades to come. Instead, the Democrats have turned the federal takeover of college loans from a moneymaker for a program they claimed was essential into a massive new financial liability.
Student loan debt is a huge problem that is making it harder for young people to get married and start families. But the solution is not to stimulate borrowing by making it easier to borrow. The answer is to reduce the cost of higher education.
Republican governors such as Ron DeSantis in Florida and before him Mitch Daniels in Indiana have done great work keeping the cost of state colleges down without increasing student debt. Young people desperately need a leader capable of such probity to reach the White House.
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