Declaration of Independence

We hold these truths to be self-evident, that all men are created equal, that they are endowed by their Creator with certain unalienable Rights, that among these are Life, Liberty and the pursuit of Happiness. - That to secure these rights, Governments are instituted among Men, deriving their just powers from the consent of the governed.

Wednesday, September 28, 2022

Will Biden’s Student Loan Fiasco Buy Him Any Votes?

            President Joe Biden signed an executive order to transfer billions of dollars from student loans to American taxpayers. Millions of Americans claimed that the “forgiveness” of $10,000 per graduate was unfair because they either paid off their student loans, or they did not take students loans. Why should they have the burden of paying the loans for other people?

            Lots of people wanted to sue to stop the transfer, but the challenge was to find a plaintiff who suffered a legally recognized injury. According to Adam Kissel, the Pacific Legal Foundation now has a whole group of plaintiffs. 

The organization’s client, Frank Garrison, has been paying down his education debt using Public Service Loan Forgiveness, a program that will forgive his remaining debt after he makes 120 qualifying payments. He’s about halfway through. He also is using the Income-Drive Repayment program, which caps his monthly payment based on his discretionary income.

Various problems with such federal programs and loan forgiveness in general have been described elsewhere, but here these programs mean that Garrison would have had his loan balance zeroed out after about 60 more months, with modest payments along the way. Now, the loan bailout would automatically cancel $20,000 of Garrison’s debt instead, subjecting him to Indiana’s income tax, while doing nothing to improve his monthly payment due to his Income-Driven Repayment participation. He will owe about $1,000 to Indiana simply because the U.S. Department of Education is changing the rules.

Since several states treat loan forgiveness the same way, there are people across all of those states in the same boat. There are probably a lot of borrowers, among the 8 million qualifying Public Service Loan Forgiveness borrowers nationwide, who also are using the Income-Driven Repayment program in these states.

That’s enough for Garrison and the others to get into court. The key point of the HEROES Act is that borrowers “are not placed in a worse position financially” in relation to their student loans because of a war or other national emergency, but the Department of Education is causing, not remedying, economic harm to people like Garrison.

            The bottom line is that neither the Department of Education nor President Joe Biden have the legal authority to do such an act. There is a reason why the Founders separated the powers between the Executive, Legislative, and Judicial branches. Congress seems cannot give its power to legislate to the president. Biden was simply trying to buy the votes of that particular category of Americans.

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