The Washington Post editorial board decried President Joe Biden’s decision to cancel certain student loans as an “expensive, regressive mistake” in a Wednesday post.
Biden announced Wednesday he would cancel up to $20,000 in student debt for Pell Grant recipients while canceling up to $10,000 in student loans for those making under $125,000 a year. A report by the University of Pennsylvania’s Wharton School of Business found the move to cancel student debt could cost taxpayers more than $300 billion over the next ten years.
“Under progressive pressure to force grandiose policy changes, President Biden has generally embraced sensible reforms over flashy gimmicks. But his Wednesday student loan announcement did just the opposite,” the editorial board wrote.
FILE PHOTO: FILE PHOTO: The newspaper’s banner logo is seen during the grand opening of the Washington Post newsroom in Washington January 28, 2016. REUTERS/Gary Cameron/File Photo
“Widely canceling student loan debt is regressive,” the WaPo editorial board continued. “It takes money from the broader tax base, mostly made up of workers who did not go to college, to subsidize the education debt of people with valuable degrees.”
The piece argues while Biden’s plan includes an income cap, there are several borrowers who would benefit under the legislation that have higher future salaries and benefits and therefore don’t need the assistance. (RELATED: ‘Just The Reality’: CNBC Host Says Canceling Student Debt Will Make Things Way Harder For Inflation)
“Mr. Biden’s plan is also expensive – and likely inflationary. The Committee for a Responsible Federal Budget estimates that extending the loan pause to the end of the year would cost $20 billion, while forgiving $10,000 for households making less than $300,000 would cost $230 billion.”
The board also notes Biden may not have the authority to grant such widespread relief.
“Mr. Biden’s student loan decision will not do enough to help the most vulnerable Americans. It will, however, provide a windfall for those who don’t need it – with American taxpayers footing the bill.”
The Biden administration is relying on a post-9/11 law to cancel the debt. The “HEROES Act” was first proposed in 2003 and intended for military members serving the U.S. in the wake of deadly terrorist attacks. The law allows for the modification of federal student loans in the midst of a “war or other military operation or national emergency.”
The Department of Education cited the “COVID-19 pandemic” as a reason Biden could use the HEROES Act to legally cancel the debt.