Dhe American President Joe Biden’s plan to waive a large part of student loans, which has now been overturned by the Supreme Court, was never able to overcome his imbalances. It has always been disproportionately large, unfair to many social groups, overbearing with the legislature—and utterly inadequate to solving what are undoubtedly major problems in American higher education.
The decision is a setback for the president’s campaign strategy, who is counting on the help of young voters to be confirmed for a second term. The program would have become one of the most expensive presidential decrees ever. Or to put it another way: Rarely has a president tried to implement such a costly vote acquisition process.
Even in times when citizens are sedated by the accumulation of numbers with lots of zeros, the Biden program seemed expensive. Of the approximately $1.6 trillion in federal student loans, $430 billion should be forgiven. Added to this are the enormous costs for the repayment moratorium, which is now in its third year, and a new version of the repayment modalities, which remain untouched by the verdict.
Congress has to decide something like that
According to calculations by experts, the program would have reached the dimensions of the two major social programs over ten years: It would have become almost as expensive as the Snap food aid program, which grants poor families grants so that they do not remain malnourished and undernourished. And it would have been more expensive than the poor family tax credit program.
Common sense alone suggests that in a system based on the separation of powers such a huge budget item cannot be decided by the Minister of Education with the stroke of a pen. Instead, it must be decided by elected representatives in Congress alone.
Regardless, the social benefit has never been on target. Above all, upper-middle-class families would have benefited. Of course, poor students would also have benefited, just less. In addition, analyzes indicate that within a few years the debt burden would have climbed back to the current level because the Biden plan does little to change the structural problems of higher education in the United States, quite the opposite.
The American system is divided into two: On the one hand, there are many universities that are not worth the money that young people invest in them through tuition fees. The result is high dropout rates, professionally unusable qualifications coupled with student debt that young people can hardly work off. The Biden plan would have provided temporary relief here. At the same time, however, he would have fed the faulty system.
On the other hand, there are excellent universities that arouse the envy of the whole world and are worth their money. Their graduates are often burdened with large debts. They, in turn, can serve them thanks to good career prospects – many of them would simply have benefited from a relief that they do not need.
More transparency would be cheaper
The constitutional judges spare this group of well-off students the wrath of the student generation, who had to pay their fees completely. And the resentment of the young people who would not have benefited from the decree because, for example, they had taken out their loan to start a business instead of for their university education.
In order to prevent students from being cheated by the higher education system, transparency requirements could be helpful. How would it be if universities had to show dropout rates, the burden of student debt and the career trajectories of graduates? Applicants would then know better whether the university is worthwhile. And it would definitely be cheaper than the Biden plan.