Nicholas Kent and Catherine Hanaway:
The U.S. Education Department has agreed to a settlement with the state of Missouri, which sued the government in 2024 over the Biden administration’s illegal student loan forgiveness. There’s a serious debate to be had about student loans ballooning out of control, but Democratic politicians have made impossible promises based on illegal maneuvers. Instead of working toward policy reforms to ensure colleges and universities deliver education at a reasonable cost, Democrats churned out debt-forgiveness plans and insisted they could cancel student loans unilaterally.
Nationally, borrowers owe nearly $1.7 trillion in student loans. President Biden gave way to pressure from radicals when he purported to cancel a substantial portion of the outstanding balance. In doing so, he (or perhaps his autopen) flouted the law and tried to saddle taxpayers—many of whom didn’t attend college or paid their own way—with billions in student debt.
Missouri first challenged these attempts at mass student loan forgiveness in 2022. Multiple federal courts held that the administration’s forgiveness plans were illegal. After losing at the Supreme Court in 2023, the Biden administration doubled down on mass loan forgiveness by loading existing income-driven repayment plans with terms that would make loan forgiveness inevitable. The University of Pennsylvania Wharton School’s budget models estimated that this would cost taxpayers $342 billion over 10 years.