President Biden officially unveiled his student loan debt cancellation plan on Wednesday and will use his executive power to cancel up to $20,000 in debt for borrowers who earn less than $125,000 a year.

“When I campaigned for president, I pledged to provide student debt relief,” Biden said. “I honor that commitment today.”

Biden will forgive $10,000 of federally held student loan debt for all borrowers who earn less than $125,000 a year, and $20,000 for recipients of Pell Grants, which are need-based. The policy will affect up to 43 million people and cost the government at least $300 billion (in all likelihood, it’s gonna cost way more than that). Ultimately, American taxpayers — many of whom didn’t take out loans to pay for their education — will be responsible for the money. A very conservative cost estimate per taxpayer is $2,100.

Biden says forcing all Americans to help pay college borrowers’ debts is an unfortunate necessity; people who borrowed from the government to go to school are so badly off. They’re broke, they’re desperate, and they need generous American taxpayers to bail them out.

“An entire generation is now saddled with unsustainable debt in exchange for an attempt, at least, to get a college degree,” Biden said. “The burden is so heavy that even if you graduate, you may not have access to the middle-class life that a college degree once offered.”

This is quite an indictment of the federal student loans program, so one might have expected Biden’s generous debt cancellation plan to be accompanied by serious reforms to the underlying system. which produced such inequalities. After all, the government admits that its loan program has ripped off millions of desperate people. Their situation is so dire, their reimbursement prospects so bleak, that Biden is asking everyone else to step in and help them.

But no, Biden’s debt cancellation plan will do nothing — absolutely nothing — to fundamentally change the incentive system that created the catastrophic spiral in the first place. Degree candidates will continue to borrow large sums of money to buy useless studies; in fact, they might feel even more encouraged to do so now that this precedent has been set.

Meanwhile, colleges and universities will have even less incentive to cut costs. Economics researchers have often found that government-subsidized student loans induce educational institutions to raise their prices for obvious reasons: if the federal government covers whatever the initial cost, universities have a vested interest increase the displayed price. Canceling student loan debt exacerbates this problem because it encourages more reckless borrowing. Indeed, the Committee for a Responsible Federal Budget estimates the cumulative level of student debt will return to current levels in just a few years.

There are structural incentives for students to borrow money that they can never hope to repay, and the fact that so many people have gone into debt is a compelling reason to change those incentives. There is no rule that says the federal government has to lure people down a path that leads to financial ruin with any frequency. Congress can severely limit or even end this practice.

A one-time cancellation of a certain level of debt held by borrowers who are in dire straits at that moment does nothing to solve the underlying problems; on the contrary, it exacerbates them. He is A slap in the face to all those who have either paid off their college debt or made different educational choices to avoid accumulating it.

If Biden wanted to make the strongest case imaginable for canceling some college debt, that course of action had to be coupled with serious changes across the higher education system. Otherwise, he is simply engaged in a vast transfer of wealth, taking hard-earned money from those who have done so. not fall prey to the federal government scam and attribute it to those who did it.

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