This week, Job Creators Network Foundation argued its case against the Biden administration’s unlawful student loan bailout process before the Supreme Court. We explained how neither Congress nor the American people give the administration the authority to unilaterally forgive more than $400 billion in student debt. We hope the court agrees with our position and strikes down this unprecedented executive overreach, setting the stage to address the root cause of the student loan crisis: college overcharging.
We sympathize with the plight of ordinary Americans saddled with massive debts. Thanks to Democrats’ bad policies, inflation is far outstripping average wages. Declining real wages make it increasingly difficult for workers to pay down their student loan balances. Yet this burden doesn’t mean Biden has the power to simply cancel student debt — something the President and former House Speaker Nancy Pelosi have admitted to in years past.
As we illustrated in a New York Times full-page ad this week, Biden’s student loan bailout gives colleges a blank check to continue overcharging students. If colleges know taxpayers will pick up the tab for their outrageous costs, they will have no reason to reform. Colleges have increased tuition at more than double the inflation rate over the past few decades. The average tuition at private, nonprofit universities is now $50,000. As a result, American colleges are sitting on $700 billion in endowments.
The Biden administration has done nothing to hold colleges accountable for their price gouging. If the President were really interested in solving this problem, he would haul the heads of major universities to the White House, like with bankers, to demand action to help the American people.
Democrats’ unwillingness to take on the college cartel results from colleges’ generous political donations and role in churning out progressive activists like those at the NAACP who protested in front of the court this week. Ironically, minorities would be disproportionately harmed by the bailout that entrenches the failing status quo.
Under the guise of increased “access” to higher education, colleges prey on minority families who desperately want a better life for their children. Black Americans face loan balances nearly twice as high as their white counterparts. The Biden administration is siding with big college over regular folks.
A lot of fat can be cut from colleges and returned to students through lower tuition. Colleges have hired an army of high-paid administrators that provide little to no educational value. They have launched dozens of sociology-adjacent degree problems that don’t provide students with marketable skills. And they have engaged in a decades-long building boom that have added expensive resort-style amenities to campuses.
One point proponents of the student loan bailout continually make is that American businesses received pandemic relief (in the form of the Paycheck Protection Program), so students should as well. Teachers union boss Randi Weingarten went on an unhinged rant about this supposed double standard in front of the Supreme Court on Tuesday.
Yet the PPP and student loan bailout are very different. The PPP was legally passed by Congress on an overwhelmingly bipartisan basis to help small businesses maintain payroll during a time when the government forcefully shut them down. From the outset, PPP was a grant without expectation its funds would be repaid. The program saved 50 million jobs and staved off mass economic ruin in 2020. There is no comparison between these two programs.
Striking down the student loan bailout will uphold the rule of law and prevent the dangerous precedent that future presidents would exploit to socialize other debts. It will also send a long overdue message to colleges that their days of unchecked tuition hikes are coming to an end.
Alfredo Ortiz is president and CEO of Job Creators Network.