Student loan cancellation may be legal, but it’s theft.

Despite the nation’s $34 trillion debt, President Joseph Biden plans to cancel some or all of the $158 billion in student debt owed by an estimated 30 million people. While this may be good politics for Democrats, this debt cancellation is unfair to most Americans.

This debt forgiveness is probably unconstitutional because it is done by executive order rather than an act of Congress. The Supreme Court will have to make that decision. But even if a court decides that student loan cancellation is legal, it would still be unfair because similarly situated Americans would be treated differently.

First, it’s unfair to Americans who haven’t gone to college. Student debt will not actually be canceled, but rather transferred to another group in American society, as the income lost through debt cancellation will have to be replaced with new taxes and increased borrowing. The burden of these new taxes and increased debt will fall on many people who previously did not have the opportunity to attend college. A mechanic at a local repair shop will pay the tuition of a college student who decides to major in mass media.

Second, it is unfair to students and families who have made sacrifices to pay for college. Many families have saved for college, worked multiple jobs, selected colleges based on affordability, and carefully researched the best majors. They made these sacrifices and compromises to ensure that neither they nor their children would be burdened with large amounts of debt after graduation. In hindsight, were they stupid? If only they knew Biden would cancel college debt, they would take a vacation every year, buy a new car every other year, let their kids choose a college regardless of tuition, and increase their earning potential. He could have learned his major regardless – no, he didn’t. Sacrifices will be necessary.

Third, it is unfair to enlisted veterans. When I enlisted near the end of the Vietnam War era, one of my motivations was to earn GI tuition to pay for college. In exchange for his three years of active duty in the Marine Corps, his GI bill for a degree from Pennsylvania State University was paid. His original GI Bill went through many amendments, but its purpose remains the same. It motivates smart young men and women to join the military. But Biden’s college debt cancellation effort would have the same effect as the GI Bill without requiring military service. If the government is going to cancel everyone’s college debt, do young people now believe it was foolish to join the military to pay for college?

Fourth, it’s unfair to those who borrowed for other reasons. Why cancel only the debt of college students who made the wrong choice in college or major, or were unlucky? Hundreds of thousands of young people are borrowing money to create and expand small businesses, a major source of innovation and jobs in the U.S. economy. But in about half of the cases, either through bad luck or poor management, these businesses fail, leaving the owners in debt or bankruptcy. Why give out similar debt relief to young people who fail in business, but give relief to college students who make bad choices or are down on their luck? Young people who go to college are worth more than those who don’t. Is there one?

Finally, it is unfair to future generations. This is unlikely to be a one-time debt relief. People expect Biden, or his successor in the White House, to extend student loan cancellation or offer new proposals. This will lead to a further increase in the already unsustainable national debt. Students and their parents rationally respond to student loan cancellation in a way that increases their debt. The military currently struggles to recruit enough quality young men and women. Extending debt forgiveness means that the current version of the GI Bill disincentivizes these men and women from enlisting. The inequity of canceling student loans but not other types of debt will become even more pronounced. And even if Biden could confidently promise that this was a one-time cancellation and would never be repeated, why would an earlier generation or a later generation keep up with loan payments? Will this generation of students have their loans cancelled?

Those receiving college debt forgiveness may argue that even if college debt cancellation is unfair, it is the government that is acting unfairly, not the beneficiaries of the cancellation. They are just using the program. In other words, the beneficiaries of these debt cancellations are not themselves thieves, but merely recipients of stolen goods. And President Biden hopes that those who have received what rightfully belongs to others will be so grateful that they will vote Democratic.

Frank R. Gunter He is a professor of economics at Lehigh University. The views expressed are those of the authors and not of the University. For better or worse, ChatGPT or its equivalent was not used at any stage in the production of this editorial.