The Biden administration’s student loan cancelation plan is problematic on a number of fronts. It is regressive. It is expensive. It is unfair. It doesn’t address the multitude of factors that drive student debt. And it is outside the president’s authority—even according to some of the president’s most powerful allies. Of course, the administration disagrees on all these fronts, but it is on the last—the president’s authority—that Biden’s big play on loan forgiveness most fantastically fails the smell test.

The Biden administration claims that the Higher Education Relief Opportunities for Students (HEROES) Act of 2003 gives it the authority to cancel student loan debt. Specifically, the administration argues that since the HEROES Act gives the Secretary of Education the power “to ensure that ‘recipients of student financial assistance . . . are not placed in a worse position financially in relation to that financial assistance because of’ a national emergency,” it has the authority to cancel student loan debt because of the pandemic.

But loan cancelation will not merely ensure that borrowers “are not placed in a worse position financially in relation” to their student loans. In many cases, it will ensure that borrowers are in a better position. Quite simply, loan cancelation goes well beyond addressing the harms borrowers faced as a result of the pandemic—its blanket application doesn’t even attempt to scale relief to the harms that occurred “because of [the] national emergency”—and it is plainly unreasonable to use the pandemic as a grounds for justifying this unprecedented action.

A quick comparison between Biden’s loan forgiveness plan and federal pandemic relief for public schools, officially known as the Elementary and Secondary School Emergency Relief Fund (ESSER) is revealing. ESSER allocated $190 billion to help public schools across the country reopen and recover from the pandemic. It was approved by Congress—not just the executive—and amounted to the largest federal investment in US public schools in our nation’s history. Indeed, ESSER was so large that many school districts are struggling to spend all the funds they were allocated.

ESSER wasn’t perfect.  Passed over three separate bills during the fog of the pandemic, it could have been scaled, targeted, and tracked with more forethought. Nonetheless, it was undeniably a response to pressing pandemic needs: schools across the nation were shutting down and going remote, and they needed resources to adapt—both so that students could get back in school and so that students could recover from large academic and social setbacks brought on by the pandemic.

Not so with loan forgiveness. The Biden administration’s intention with forgiveness is to “address the financial harms of the pandemic,” but student debt was overwhelmingly incurred prior to the pandemic, and repayment requirements were already frozen for a couple of years.

Though less connected to the pandemic, loan forgiveness is much costlier than ESSER. According to an estimate from Wharton, forgiveness alone—the plan also includes changes to income-driven repayment—will top $500 billion, and the plan as a whole could end up costing over $1 trillion. That means the administration wants to spend two and a half times what Congress spent to help K-12 students catch up from colossal pandemic losses to forgive mostly pre-pandemic loans.

This should raise questions—and eyebrows—across the political spectrum. Why is the administration spending half a trillion dollars on student debt relief because of the pandemic without any clear link to the pandemic? And even if there were a link, why spend 2.5 times as much on debt holders as on K-12 schools and students, whose pandemic harms cannot be denied? If the administration believes both that loans deserve forgiveness and that public schools deserve comparable spending, it should make that argument. But, so far, it has been vocal about the former and silent about the latter. If the administration can defend spending 250 percent of what the government spent in the largest federal investment in US public schools in our nation’s history to forgive student debt, it should.

Regardless of your view on the respective merits of loan forgiveness and ESSER, unilaterally given or not, the two are not parallel. The harms of the pandemic have been used as justification for both, but on loans, the pieces simply don’t add up. That is because the Biden administration is not using the pandemic as a rationale for loan forgiveness but as an excuse.

The post Next to K-12 Pandemic Relief, Biden’s Rationale for Loan Forgiveness Doesn’t Add Up appeared first on American Enterprise Institute – AEI.