Student loan debt forgiveness is unfair

Most of the world has moved on from COVID-related restrictions and setbacks, but the student loan debt pause is still in effect until October, and borrowers anxiously await the Supreme Court’s ruling on President Biden’s college debt forgiveness plan to come this week. Before the decision lands, let’s consider what is at stake.

Is forgiving $430 billion of federal student loan debt (up to $20,000 per borrower) reasonable for a country facing $32 trillion in national debt? Individuals choose to pursue student loans knowing they will have to repay the loan with interest. It’s not a bait and switch. Yet, Biden and many economic progressives believe all taxpayers should be on the hook for the decisions made by student borrowers. 

President Biden has politicized a popular issue in order to score points with voters, but he must know the economic and logistical foolishness of this charade. 

Consider that 65 percent of the country has not attended college and, therefore, has no student loans. Biden’s call to forgive debt for college graduates illuminates an elitist disregard for other kinds of debt—often incurred without a choice. It’s classist, uncharitable, elitist, and unfair toward most Americans. 

A mom struggles to pay for her child’s medical care. A man needs an operable truck to get to work each day. A family can’t pay its electricity bill. Why do those who chose to take on college loans deserve help from those who didn’t and have their own financial difficulties?

Biden’s loan forgiveness is available even for some households that make up to $250,000 a year. Imagine telling a construction worker making $50,000 a year—a father supporting a family of five—that he’ll be paying toward the college loans of a 6-figure earning computer programmer down the road. 

The National Taxpayers Union finds that this forgiveness plan may cost each American family $2,500, and the GAO reports that debt payment pauses since 2020 have already cost the country $105 billion. How is this good for the majority of Americans or the national economy in general? And how can it be called the “Biblical” thing to do (as some Christians have done) when it harms more people than it helps? 

Recent college graduates may not be making huge salaries today, but their lifetime potential earning is 84 percent higher than non-college graduate Americans who would now be coerced to help pay down loans. 

To be sure, there is a problem with the cost of college and the corruption of interest-hiked loans. That’s a separate issue that won’t be solved with loan forgiveness. In fact, forgiveness will only exacerbate the problem, telling universities they can continue to raise the cost of education and put millions more student and graduates into debt. Banks, too, will be big winners. Taxpayers are the losers—as are the millions of citizens who managed to gain a college education by working or attending a less expensive school.

Furthermore, the results of the COVID debt payment pause clarify another problem with long-term forgiveness. According to the National Bureau of Economic Research (NBER), the three-year payment pause has worsened debt. Those who received payment pauses increased consumption in the short term and debt in the long term. They didn’t attempt to get their financial bearings; most just used the pause as an excuse to spend more elsewhere. 

This results from a nation that’s taught its citizens that when money runs out, you print more. When you can’t afford something, you borrow and make the minimum payments until you die, leaving someone else to deal with the mess. Such a tack is selfish, foolish, and short-sighted. 

At first glance, student loan forgiveness doesn’t seem intimately tied to Christian ethics, but it is. As Christians, we are called to steward our resources well and remain free from unnecessary debt. This doesn’t mean taking out loans for college is wrong. Still, it should be done responsibly and without reliance on government-backed promises—and certainly not on those utterly unaffiliated with our personal education choices. 

Student loan forgiveness forces working-class Americans, many of whom didn’t attend college because of the cost, to foot the bill for those who made a different choice. It’s wrong, unjust, and irresponsible to dump this burden on them just so Joe Biden can pay off a political debt as he gets ready to run for a second term. As we wait for the Court’s decision, let’s remind ourselves why it matters.