The debate surrounding the forgiveness of student loans has been ongoing perennially. Most people have varying opinions on the issue, with factions differing on whether the federal government needs to forgive student loans. The authors here present a clear and concise argument, supported by rational and evidence-based reasons for forgiving student loans as a costly mistake (Bloomberg, 2022). Critically, the authors detail how the government is plunging itself into an avoidable crisis by choosing to annul the student loans. The main argument that cancellation of student debt is wrong is that the order is uneconomical, illegally passed, unfair to those who paid and those who did not attend college, limits government revenue and is politically charged.
First, the authors link the president’s decision to forgive student loans to the midterm elections. It is sensible that the president is coerced to pass this policy to win the hearts of the majority of people with student debts on the verge of the midterm elections. Despite the strategy’s effectiveness in convincing the masses that he has their concerns at heart, the authors argue that he is making a costly economic mistake that has dire consequences for current and future generations. Here the editors provide figures showing the amount the administration is willing to cancel for every student loan beneficiary. The figures paint the picture of the vast amounts of revenue the government will lose if the administration implements the policy. It undermines fiscal discipline, which mandates that borrowed federal money must be returned and channelled to other development projects. As the author outlines, it is indeed a moral hazard as it promotes behaviours contrary to financial and moral discipline (Bloomberg, 2022).
Additionally, the authors indicate that the move is fuelled more by political motives rather than by well-thought economic decisions. By clearly outlining the legal irregularities in passing the order, the author shows that the move to cancel student loans was unconstitutional and driven by hidden political agendas. While one may praise the Biden administration for being sympathetic with the majority of students or graduates who may not be able to pay the debt, they may be blind to the fact that it is a breach of the earlier agreement between the deferral government and the recipients of the funding.
The argument presented in the article is quite appealing and paints the picture of the unconstitutionality of the move and the lack of foresight by the administration. The statistics and evidence in the report show how much the taxpayer’s money will go to waste. It raises more questions such as these in the minds of the readers and every rational American. Indeed, how fair is it to future generations who will not have the same benefits as the beneficiaries of student loans? Is it a sustainable economic approach that will create a reliable generation of student-loan beneficiaries? Is the move well thought out, or is it driven by the ruling party’s desire to woo people in the midterm primaries? The belief and reasoning drive all these questions that the cancellation of student loans does more harm than good.
Lastly, the author argues that this is a retrogressive approach to the student debt issue and lacks an accountable and sustainable basis. The best approach, as postulated in the article, is that which makes both enrollment easy and hardens defaulting through favourable repayment terms. As 2023 nears, the administration needs to find a consensus not to annul the debts but instead pass policies that will provide favourable mechanisms for the students to repay and recover the federal money invested in their higher education (Bloomberg, 2022). The author suggests that the president needs to be clear on ambiguities
Conclusion
In conclusion, the article is quite detailed and effective in re-emphasizing why the Biden administration was wrong in forgiving student loans. The author borders on the obvious socioeconomic impacts of the move while using detailed statistics to show how it will have more significant economic repercussions. There is genuinely no social or economic value accrued through annulment of the student loans as it will be unfair to those who paid, a breach of contract and a reduction in anticipated government revenue. Progressively, the government needs to find sustainable means of debt collection that will be favourable to the students and guarantee full repayment.
References
Bloomberg(n.d.). Www.bloomberg.com. https://www.bloomberg.com/opinion/articles/2022-08-25/student-loan-forgiveness-biden-plan-to-cancel-debt-is-a-costly-mistake
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