EDITORIAL: Biden punts on student loan debacle

Christmas came early for student loan recipients when President Joe Biden reversed course three days before the holiday and again extended a payment freeze first implemented as the pandemic unfolded nearly two years ago. For weeks leading up to the decision, Mr. Biden had maintained that the payment pause would expire as scheduled at the end of January. But when progressive Democrats howl, the president falls to his knees (see: the ill-fated eviction moratorium).

“We know that millions of student loan borrowers are still coping with the impacts of the pandemic and need some more time before resuming payments,” the president said in a statement pushing the deadline back to May 1.

In fact, employment opportunities are plentiful even as the omicron variant spreads rapidly across the United States. Forced lockdowns and business closures have fallen out of favor with the political class, and rightfully so. The idea that the majority of student loan recipients need more than 24 months of relief is based more on a cold political calculus than reality.

Mr. Biden, having failed to deliver on the progressive Build Back Better boondoggle, is under intense pressure from the hard left to forgive massive amounts of student loan debt. But asking those who didn’t go to college, those who paid their way or those who honored their loan obligations to subsidize up to $1.7 trillion in higher-education loan write-offs comes with significant political risk for a president who has been sinking like a stone in the polls with the midterms approaching. The White House hopes this latest extension will buy time by keeping liberal Democrats at bay while lulling opponents of loan forgiveness to sleep.

But Mr. Biden has had more than a decade to chart a path forward. It’s time he did so.

Let’s remember that it was less than 12 years ago that the Obama-Biden White House and congressional Democrats used the Great Recession as the excuse for essentially nationalizing the student loan business. Well-known financial expert Sen. Elizabeth Warren, D-Mass., insisted that the government takeover would save billions of dollars. Instead, now she demands that the taxpayers eat up to $50,000 per borrower, much of which would benefit well-off graduate students who took out more than they could repay to earn degrees that have minimal market value.

Who could have guessed that government loan programs which eschew traditional underwriting and shower trillions of dollars on young adults with little credit or work history would become a money pit? Or that college tuition would skyrocket over the years as more and more federal money flooded academia?

Sen. Warren barely offered any defense of her position when an Iowa father confronted her during the 2020 campaign, leading to a highly revealing exchange. “My daughter’s getting out of school, I saved all my money, she doesn’t have any student loans,” the man said to Sen. Warren. “Am I going to get my money back?” After Sen. Warren says, “Of course not,” the man isn’t assuaged. “So you’re going to pay for people who didn’t save any money and those of us that did the right thing get screwed,” he says, adding, “My buddy had fun, bought a car, went on vacation. I saved my money. He made more than I did, but I worked a double shift … since my daughter was 10. … We did the right thing and we got screwed.”

To make matters worse, Democrats offer few prescriptions for fixing the problem other than their “free” college pipe dream or wiping the slate clean at the expense of those who have no such loans and then repeating the process all over again. No borrower of sound mind would think of making a payment right now.

A reasonable student loan program would, at a minimum, rely heavily on the private sector while putting financial limits on any need-based taxpayer assistance and demanding that institutions produce productive graduates if they hope to benefit from limited federal tuition programs. It might also stress that a college degree isn’t the only avenue to a comfortable living.

The controversy over student loan debt isn’t going away, and the Biden administration should be forthcoming about its agenda rather than seeking cover behind endless delays. In the meantime, though, this debacle is instructive if for no other reason than it highlights the ugly results when the progressive war on personal responsibility, the liberal fight against fiscal sanity and the Democratic Party’s deep faith in big government collide head on.