By John Ubaldi, “Ubaldi Reports”

The past couple of week’s intense pressure is being placed on President-elect, Joe Biden, to forgive $50,000 in student loan debt.

Biden is getting intense pressure from the progressive base of the Democratic Party to forgive student loan debt with Democratic Senate Minority Leader Chuck Schumer stating, “We have come to the conclusion that President Biden can undo this debt, can forgive $50,000 of debt the first day he becomes president,” Schumer said on Monday outside his office in Midtown Manhattan. “You don’t need Congress; all you need is the flick of a pen.”

Two of the Democratic challengers to Joe Biden during the 2020 presidential election Massachusetts Senator Elizabeth Warren and Vermont Socialist Senator Bernie Sanders have both advocated for the complete elimination of student loan debt.

During the presidential contest, Biden has supported the forgiving of $10,000 in student loan debt.

According to the Department of Education the current amount of student loan debt stands around $1.6 trillion with the average student loan debt pegged at almost $37,000 per borrower. Currently student loan debt is now the leading cause of debt for most Americans.

For Biden to forgive any portion of student loan debt this will depend on what happens in the runoff Senate election in Georgia scheduled for January 5th 2021. If Democrats win both races there will be a 50-50 Senate with Kamala Harris the tie breaker thus making Senate Minority Leader Chuck Schumer the new majority leader.

Democrats are going full throttle on this scenario, coupled with their slim majority in the House, progressives are eager to begin enacting their socialistic agenda for America. The first issues would be to have Biden forgive $50,000 in student loan debt, no matter what happens in the Georgia Senate race.

Current Senate Minority Leader, Chuck Schumer, has openly advocated that if he becomes the majority leader in January and with a Democrat controlled majority in the House stated, “I have a proposal with Elizabeth Warren that the first $50,000 of debt be vanquished, and we believe that Joe Biden can do that with the pen as opposed to legislation.”

If the Democrats lose one of the Georgia Senate races, then Schumer is pressuring Biden to just sign an executive order forgiving student loan debt. This action by Schumer, Warren and other progressive Democrats puts into place a question that definitely needs to be asked.

Does a president have the constitutional authority to issue such an executive order? This would definitely raise serious constitutional questions over executive overreach. The constitution is explicit that the House of Representatives has the power of the purse not the executive.

This would be interesting considering for the past four years Democrats have been blasting Trump for excessive executive overreach. Wouldn’t this end any kind of healing after such an acrimonious and contentious election?

How does this square with Biden’s call for more national unity and bipartisanship. If Biden attempted such extensive executive power grab he could be facing a massive court fight over the constitutional aspect of such an action.

If Biden would contemplate such an action of forgiving student loan debt by executive action what do you tell the millions of college graduates who saved, worked and sacrificed to graduate without indebting themselves?

What about families who saved, worked extra shifts to finance their children’s college education, only to have a progressive president forgive student loan debt?

How would non-college graduates with debt of their own, especially after the economic crisis resulting from the coronavirus feel about bailing out college graduates, and on average who will make more then they will?

How many college graduates were irresponsible in obtaining so much debt in the first place, but are rewarded by having their debt forgiven.

If Biden issued this executive order what would prevent future presidents from acting unilaterally in forgiving other kind of debt to curry favor with their political base?  Wouldn’t this set a dangerous precedent?

How would colleges and universities react, wouldn’t this be encouraging the raising of tuition knowing full well that the federal government would institute an additional bailout in the future? This would be setting a major precedent.

The question should be answered as why obtaining a college and university education cost so much?

A few of the reasons were that after the recession of 2008-09, states invested far less in universities and colleges, far more individuals are seeking out high education. Colleges and universities are now offering far more amenities that have nothing to do with academics. One of the final elements is the entire student loan system itself, and the explosion of the administrative state of non-academic positions found on college and university campuses.

By contrast, “According to the Department of Education data, administrative positions at colleges and universities grew by 60 percent between 1993 and 2009, which Bloomberg reported was 10 times the rate of growth of tenured faculty positions.” This increase has only accelerated in the years since.

The New York Times uses the massive California State University system as a case example, noting that between 1975 and 2008, the number of faculty grew from 11,614 to 12,019. By quite a sharp contrast, the total number of administrators grew from 3,800 to 12,183. That’s a 221% increase.

It’s strange and one the media has perpetrated journalistic malpractice by failing to report the change to the student loan program in 2010, as all who are advocating for the elimination of student loan debt caused. This includes Biden, Schumer, Sanders and the Democratic Party!

The changes made to the student loan system in 2010, when Democrats under the Obama presidency passed the Health Care and Education Reconciliation Act, and shortly thereafter passed a little-known rider that accompanied this legislation.  The rider was the Student Aid and Fiscal Responsibility Act, changed the way student loans were granted.

Before this legislation was 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.

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

Unfortunately just like healthcare reform it had the opposite effect, instead of making a college education more affordable it dramatically increased the cost of higher education.  At the time higher education costs were rising, but instead of addressing why costs went up, the Obama administration and the Democratic Party made the cure worse than the disease.

Instead of reducing college costs, tuition went up dramatically! Instead of reducing the amount of student loan debt, it only increased the debt incurred for those obtaining higher education.

College and universities were now free to raise tuition fully aware that students were so eager for higher education, and these institutions could care less because they knew all loans would be fully backed by the federal government.

https://www.ubaldireports.com/taking-on-the-challenge-of-curbing-skyrocketing-student-loan-debt/

The same Democrats who are actively pushing for a bailout of student loans were the same ones that supported, voted, and created the problem in the first place.  This would include Biden, Schumer, Vermont Socialist Senator Bernie Sanders and Democrats currently in the Congress today, who voted for the bill in 2010.

It’s interesting that Democrats consistently tout they are the party of the working class, but this bailout of student loans would constitute a dramatic transfer of monetary assets to more affluent students.  Most studies would find that the majority of college graduates often come from financially secured families, who tend to be better off and well connected.

A recent Brookings Institution analysis 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.”

Instead of blaming others maybe those who contributed to this disaster in the first place need to take a hard look of why college is so expensive.

Let’s not make the cure worse than the disease.