By John Ubaldi, “Ubaldi Reports”

Ever since President Biden assumed the presidency, Democrats have been pushing for the forgiveness of up to $50,000 in student loan debt, and Biden himself is contemplating some form of relief, unfortunately they never seem to address the real problem.

Currently, student loan debt stands around $1.6 trillion, which has far outpaced credit card debt.

Vermont Socialist Senator Bernie Sanders, has continually advocated for the forgiveness of $50,000 of student loan debt as a matter of economic necessity.

President Biden campaigned on and is contemplating a more modest approach of forgiving around $10,000 in debt relief for borrowers. With a Republican red wave fast approaching in this year’s mid-term election, the president is looking at anything he can do to shore up his base among young people and he believes this may be it.

Many economic policy centers and economist calculated that this would cost the American taxpayer around $1 trillion depending how robust the president goes, but even his own proposal would cost roughly $300-500 billion in added cost to the national debt.

What hasn’t been discussed is how would this debt relief paly to blue collar workers, those without a college degree or those that paid off their student loans, in essence there taxes would be going to students who are typically in the upper income level, basically subsiding the affluent.

Now their solution is a wealth transfer as a paper by the University of Chicago’s Becker Friedman Institute for Economics shows that erasing all student loan debt would distribute $192 billion to the top 20% of earners in the U.S., but just $29 billion to the bottom 20% of U.S. households.

A recent analysis from the liberal leaning Brookings Institution of Federal Reserve data found: “The highest-income 40% of households (those with incomes above $74,000) owe almost 60% of the outstanding education debt and make almost three-quarters of the payments. The lowest-income 40% of households holds just under 20 percent of the outstanding debt and making only 10% of the payments.”

Time is running out on a decision regarding student loan debt, does the president continue to place a moratorium on payments that has been going on since the start of the pandemic, considering Biden has repeatedly stated the economy is doing great.

Does the president, end the moratorium and starting having students start making payments on student loan debt or does he institute some form of forgiveness?

Each has some form of political liability for the president as enters the mid-term elections in November.

The question which should be asked of Democrats and the president is why should we trust you to fix the student debt loan problem when you created the mess in the first place?

What many may not know that the student loan debt was a problem in 2010, but the Democrats decided to nationalize the student loan program instead of it being administrated by financial institutions.  In 2010, President Obama and the Democratic Party made the situation dramatically worse, after the passage of the Health Care and Education Reconciliation Act, a few weeks later a little-known rider was added called the Student Aid and Fiscal Responsibility Act, which fundamentally changed the way student loans were granted.

A rider is an additional provision that is added to a bill or other measure under the consideration by the Congress that has nothing to do with the subject matter of the bill, in this case the rider was attached to health care reform act or has it is commonly known as Obamacare.

The healthcare reform bill was passed and signed into law by President Obama on a stickily partisan vote with not one Republican voting in favor. Like healthcare the Student Aid and Fiscal Responsibility Act had an extreme adverse effect instead of making college and university less expensive it exploded the cost, and with it student loan debt quadrupled tenfold.

Prior to the passage of game changing legislation signed into law by President Obama, student loans were issued as guaranteed loans, with the banks as the loan agent and the terms determined by the federal government. After its passage the federal government assumed all responsibilities for student loans and the banks were eliminated from the entire process.

Obama commented that “By cutting out the middleman, we’ll save American taxpayers $68 billion in the coming years,” the president said. “That’s real money — real savings that we’ll reinvest to help improve the quality of higher education and make it more affordable.”

Unfortunately this had the opposite effect as college and universities could raise the cost of tuition knowing fully that students wanted a college education and the federal government would back student loan financing. The act did nothing to rein in college spending instead the non-academic side of higher education namely the administrative bureaucracy exploded far faster than any other cost.

Many Democrats including Sanders have continually look to the European model on higher education, but they fail to understand or examine the full impact of higher education in Europe.

An Editorial in the LA Times states that much of Europe has free college but it comes with caveats, German public universities, for example, are tuition-free but bare-bones; few are admitted; students generally live at home and commute, class sizes are large, and student activities and services scant. And, like Germany, governments in other nations are willing to foot the tuition bill.

If America wants to keep cost low would we be willing to follow the European model of higher education? The same editorial states that team sports, most of which are heavily subsidized at schools here, play a much smaller role in other nations. The number of administrators is much lower; bloated administrative costs are the primary driver of ballooning college prices in this country. The Department of Education should be putting colleges on notice that they must reduce these costs to continue receiving federal aid.

The other aspect that is never considered is the over emphasizing that everyone attend college, at the expense of vocational training, not only in the traditional building trades, but the nation should invest in high technological vocational programs such as cyber warfare and drone careers.

Many experts in these fields often state you don’t need a college education to succeed in these fields, remember the Russian cyber-attack on the U.S. didn’t have college degrees just the skills to hack.

Like always the old adage is when someone from the government says I am here to help, grab your wallet, as they always make the situation worse.