Theorems on the Student Loan Cancelation

In addition to the observations Scott and John have entered below, a few additional thoughts:

Invoking the HEROES Act as the legal justification for student debt forgiveness reminds of Franklin Roosevelt invoking the World War I-era Trading With the Enemy Act as legal ground for his “bank holiday.” At the time everyone was so dumbstruck and panicked that no one thought to raise a legal challenge, but that’s surely not the case today, though I do wonder if legal challenges may founder for lack of standing. (I’ll need some legal mind more fully versed in standing issues than I am, and we’ll surely take it up with John Yoo on this week’s 3WHH podcast, which we’re recording tomorrow because of travel schedules.)

But suppose a federal judge issues an injunction or strikes down the whole scheme—especially a Trump judge. I’ll bet Biden and the political hacks around him would welcome this outcome, as it becomes a talking point for him: “Those mean Republicans hate students, and we have to stop Republicans from further ‘packing’ the courts! They’ve already taken away your reproductive freedom,” etc. After all, since Biden has been told he’s FDR/LBJ II, it plays to his demagogic inclinations.

But there’s an even deeper logic at work. Young voters tend to drop off a lot in mid-term elections, and Biden has just given the college cohort a reason to turn out this fall—especially if a judge inhibits this blatant vote-buying scheme. Nate Silver (or “Nate Bronze” as I call him) Tweeted the quiet part out loud:

It is not necessary to go beyond the vote-buying motivation to explain this move—but I can! As John reported here not long ago, college enrollment is dropping fast. Given that the left regards universities as a key bastion of power and influence, you can consider this move as merely one step in an ongoing bailout for a key leftist institution. Needless to say, all institutions will move to capture subsidies (like car companies raising prices for electric vehicles after the IRA passed last week), and the high cost of higher education has been driven in part by past government subsidies, such as student loans, etc. Colleges will now feel less pressure to restrain future tuition hikes.

Want to see one small example of how this can fall out? At American University in Washington DC, support staff are out on strike this week, demanding higher wage and benefit increases than AU has offered. This week also happens to be move-in week for new students. Here’s one view on how it’s going:

Suggestion: Republicans ought to attack this with the proposal that universities should be directly on the hook for student debt relief, and, better, than universities with large endowments (Harvard, Yale, UT/Austin, etc) ought to be ineligible for student loans since they can afford to pay every student’s tuition without government help.

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