Biden Takes Another Swing at Student Debt Cancellation

Happy Wednesday! We’re not sure what it says about society that it takes an ancient sign of the end times to get us off our phones.

Quick Hits: Today’s Top Stories

• President Joe Biden on Tuesday criticized Israel’s strike on World Central Kitchen vehicles earlier this month and called on the country to implement a six-to-eight-week humanitarian ceasefire in Gaza. “I think it’s outrageous that those four, three vehicles were hit by drones and taken out on a highway, where it was along the shore, it wasn’t like it was a convoy moving,” Biden said in an interview with Televisa-Univision. “What I’m calling for is for the Israelis to just call for a ceasefire, allow, for the next six [to] eight weeks, total access to all food and medicine going into the country.” Administration officials have since clarified that the remarks didn’t mark a change in U.S. policy toward the war, despite the president’s failure to mention the hostages still held by Hamas in Gaza. Meanwhile, ongoing ceasefire and hostage deal negotiations hit another roadblock after Hamas informed mediators that, in order to satisfy Israel’s request for the release of another 40 living hostages, it would have to free male Israeli troops—which the terror group is unwilling to do. Representatives for Hamas have reportedly told negotiators the group no longer has 40 living elderly or female hostages in its possession.
• The Arizona Supreme Court ruled on Tuesday that all abortions in the state will soon be banned, with the exception of those necessary to save the life of the mother. The 4-2 decision held the state’s 15-week limit, adopted in 2022, doesn’t supersede an 1864 abortion ban that had long been preempted by Roe v. Wade because the state “legislature has never affirmatively created a right to, or independently authorized, elective abortion.” Enforcement of the old ban isn’t set to begin for at least two weeks, and Arizona voters could effectively reverse the decision in a November vote on a ballot measure. Several prominent Republicans in the state—including likely Senate nominee Kari Lake and former Gov. Doug Ducey—distanced themselves from the court’s decision, with Lake saying in a statement that the “pre-statehood law is out of step with Arizonans” and that she will oppose any “federal ban(s) on abortion” if elected to the Senate.
• A New York state appeals court judge rejected another last-ditch attempt by former President Donald Trump to delay the start of his hush money criminal trial, set to begin Monday, while he challenges a gag order imposed on him by the judge overseeing the trial. The rejection came only one day after a different appeals court judge shot down a separate attempt to delay the trial related to hush money payments to porn star Stormy Daniels, which is set to begin on April 15.
• Rail company Norfolk Southern agreed on Tuesday to a $600 million settlement to resolve a class-action lawsuit related to the February 2023 train derailment in East Palestine, Ohio, that spilled and burned hazardous chemicals. The agreement settles class-action claims for residents and businesses within a 20-mile radius of the train crash and personal injury claims for residents within a 10-mile radius, providing payouts the plaintiffs can use “in any manner they see fit to address potential adverse impacts from the derailment.” The settlement still needs to be approved by a judge. 
• GOP Rep. Marjorie Taylor Greene circulated a letter to her House colleagues on Tuesday doubling down on her threat to oust Republican House Speaker Mike Johnson. “I will not tolerate this type of Republican ‘leadership,’” she wrote, citing his stewardship of the government funding bill passed before the Easter recess. In March, Greene filed—without requiring an immediate vote on the question—a resolution that could trigger procedures to remove Johnson. She described the motion last month as a warning, and didn’t indicate a timeline in her letter yesterday for bringing it to the floor. 
• New York Attorney General Letitia James announced on Tuesday that Jacob Wohl and Jack Burkman—two far-right operatives—agreed to pay a $1.25 million settlement over a voter suppression robocall scheme targeting black voters that the two orchestrated in 2020. Last March, a federal judge found that Wohl and Burkman “set into motion a full-scale voter suppression operation during the summer of 2020 to discourage eligible voters from voting by targeting mail-in voting in the 2020 Election.” 
• Peter Higgs—the Nobel Prize-winning British physicist who inspired the search for the subatomic ‘God particle’—died Monday at the age of 94. To help explain the Big Bang, Higgs theorized in 1964 about the existence of a particle that is responsible for how larger particles acquire mass. His theory was proven correct in 2012 when scientists announced the discovery of the particle through experiments using the Large Hadron Collider at the European Organization Nuclear Research—the scientists dubbed the new discovery the “Higgs boson.”

Student Loan Debt Jubilee 2.0 

If at first you don’t succeed, try, try again. Or, if you’re President Joe Biden trying to redistribute federal student loan debt, try, try again, and again, and again. 

Biden on Monday introduced his latest major effort to fulfill a key 2020—and now 2024—campaign promise: a five-pronged, broad-based effort to “cancel” the student debt of millions of individual borrowers. The Biden administration argues the policies will serve minorities overburdened by student debt and help the economy overall, but critics of this and similar efforts argue—as they did in the first go-’round—it’s an inflationary and unfair handout to the richest and best-educated citizens. Even the Biden administration is hedging on the likelihood these plans come to fruition fully intact.

Once a relatively fringe progressive idea, “forgiving” federal student debt has moved firmly into the Democratic mainstream in the Biden era. Biden’s first attempt—which would have “canceled” between $10,000 and $20,000 for certain borrowers making less than $125,000 annually—was struck down as unconstitutional by the Supreme Court in June 2023. The legal justification for the effort—the post-9/11 HEROES Act that allowed the secretary of education to “to ‘modify’ or ‘waive’ student debt repayment provisions for borrowers affected by war or national emergencies,” as we put it in July—didn’t pass the Supreme Court sniff test. Or, as Biden described the episode in his State of the Union address a month ago, “I was told I couldn’t universally just change the way in which we did—dealt with student loans.” 

Since then, the Biden administration has been tinkering with programs that already existed in some form, including dramatically reimagining income-driven repayment plans that have drawn the legal ire of some state attorneys general. “On the margins, they’re pushing to forgive debt in every manner possible, and trying to find all the different places where they have some authority in order to make it happen,” Beth Akers, a senior fellow at the American Enterprise Institute who studies the economics of higher education, told TMD of the Biden administration’s ongoing debt cancellation efforts.

But on Monday, Biden announced the details of the more significant Plan B he’s been promising since last year’s Supreme Court loss. One major element of the plan would not target a borrower’s principal loan amount, but rather the accrued interest on that principal amount—with a promise to cancel up to $20,000 “of the amount a borrower’s balance has grown due to unpaid interest” for all borrowers, and the whole amount for borrowers who are enrolled in certain income-driven repayment schemes. Biden would eliminate the undergraduate debt of borrowers who have been making payments for at least two decades and, in two of the vaguer provisions, waive loans for borrowers who attended “low-financial-value programs or institutions” or who “experience hardship” paying their loans, considered on a case-by-case basis. If implemented as written, the plan would have all of these borrowers—with the exception of the last group—automatically enrolled in these programs, without the requirement to opt-in.

The administration says this plan would fully eliminate the student debt of some 4 million borrowers and wipe away the accrued interest for 23 million. While there’s not yet an official price tag on Plan B, the non-partisan Congressional Budget Office suggested Plan A, which was slightly broader, would have cost the U.S. government $400 billion over the next decade. 

Testing fate, Biden boldly promised a friendly crowd in Wisconsin on Monday that many of his administration’s “alternative paths” to reduce borrowers’ student debt are “not challengeable.” At least some of his confidence likely rests on the fact that, instead of hanging its new debt forgiveness suite on the HEROES Act, the administration is this time relying on the more obvious Higher Education Act (HEA), which gives the secretary of education some leeway to modify the terms of federal student loans.

If this new mechanism is so foolproof, according to Biden, why wasn’t it the administration’s first choice? In short, it’s slow. Using the emergency powers laid out in the HEROES Act seemed to be an effort to sidestep a painstaking and long administrative process, called “negotiated rulemaking,” that the HEA in particular requires. The process—from which policies rarely emerge unaltered—can quite literally take 1,000 days, and it involves lots of parties debating the proposed policy. And that all happens even before the standard notice and public comment phase that most rules from federal agencies undergo before they can become official policy.

Despite Biden’s bullishness on this justification’s legal soundness, the administration’s official language laying out the actual details of the plan is rather squishy. The Education Department’s press release used the phrase “if the plan is finalized as proposed,” and the White House’s own announcement included a similar caveat six times. It’s possible—perhaps even likely—that the plan will change, and the final rule, whatever form it takes, could be posted in November, meaning it probably wouldn’t go into effect until July 2025 at the earliest. Legal challenges, which the scheme is very likely to face, could further delay its implementation. Biden’s Saving on a Valuable Education (SAVE) plan, one of his signature income-driven repayment plans, is currently embroiled in a legal challenge from 11 state attorneys general. 

The Biden administration may have favored expediency in an effort to woo young people ahead of November’s election. Roughly a third of people between the ages of 24 and 33 hold student loans, as do about a quarter of those 18-23. Biden’s support among young voters is looking a little soft, as The Dispatch’s John McCormack reported Tuesday, in a race where Biden can ill-afford to lose voters even on the margins. Put more bluntly: “If this attempt went through, it would—to [Biden’s] mind—not only lift the shackles of decades of debt from a chunk of the voting public, but also possibly compel people, filled with newly grateful spirits, to vote for him,” Liz Wolfe wrote for the libertarian Reason magazine. “So you can understand why he’d be so persistent.”

But it’s not just young people who could benefit on the individual level from the cash infusion that is having debt redistributed to the American taxpayer. “Beneficiaries of student debt forgiveness would be higher income, better educated, and whiter than beneficiaries of just about all other programs designed to reduce economic hardship and promote economic opportunity,” economist Adam Looney—who served on President Barack Obama’s Council of Economic Advisers—wrote in a 2022 report on the impacts of student debt forgiveness for the left-leaning Brookings Institution. In 2020, Biden won white, college-educated voters by some 15 points. 

Biden argues the benefits of debt relief go beyond the individual. “Folks, look, such relief is good for the economy because folks are now able to buy a home, start a business, start a family,” he said during the State of the Union. A White House analysis of the economic impact argued that income-driven loan repayment, “because it brings down the cost of taking out loans to go to college, has the potential to lead to longer-term economic growth if it leads to greater educational attainment.”

But critics of the policy take issue with that framing. “You can’t solve a very real debt problem by issuing more debt,” said Maya MacGuineas, president of the Committee for a Responsible Federal Budget. “The President’s previous student loan cancellation plan was expensive, inflationary, poorly targeted, and would have boosted rather than reduced tuitions. This plan similarly misses the mark.”

In his announcement on Monday, Biden praised the value of a university education for upward mobility. “While a college degree still is a ticket to the middle class, that ticket is becoming much too expensive—much too expensive,” he said. Indeed, the price of a university degree is up 1,200 percent since 1980 compared to an overall inflation rate of 236 percent. 

But Akers, of AEI, worries that student loan forgiveness may only exacerbate that problem. “As you tell today’s and tomorrow’s students that they don’t need to pay back the money that they take out to pay for college today, what keeps an institution from trying to keep their prices in line with the value that they deliver?” she told TMD. “The students aren’t going to pay the price tag anyway. Students know it, colleges know it, and so I think we’re likely to end up with even more rapid tuition inflation than we currently have.”

Worth Your Time

• Social psychologist Jonathan Haidt’s latest book has reinvigorated the debate about whether the steep decline in youth mental health is caused by smartphone and social media use, or simply correlated with it. Writing for his Substack After Babel, Haidt responded to a skeptical review of his book published in Nature last month. “For centuries, adults have worried about whatever ‘kids these days’ are doing,” Haidt wrote. “From novels in the 18th century to the bicycle in the 19th and through comic books, rock and roll, marijuana, and violent video games in the 20th century, there are always those who ring alarms, and there are always those who are skeptics of those alarms. So far, the skeptics have been right more often than not, and when they are right, they earn the right to call the alarm ringers ‘alarmists’ who have fomented a groundless moral panic. … But the skeptics are not always right. … The lesson of The Boy Who Cried Wolf is not that after two false alarms we should disconnect the alarm system. In that story, the wolf does eventually come.”
• In an excerpt from her latest book published in The Atlantic, historian Doris Kearns Goodwin tells the tale of digging through the archives of her late husband, Dick Goodwin, from his time as a speechwriter for some of the most notable figures of the 1960s. “He had resolved to go back in time,” she wrote. “He wanted me to go back with him to the very first box and work our way through all of them. I was not only his wife but a historian. ‘I need your help,’ he said. ‘Jog my memory, ask me questions, see what we can learn.’ I joined him in his study, and we started on the first group of boxes. … ‘Who would you bet on?’ he asked me one night at bedtime. ‘Who will be finished first—me or the boxes?’ Our work on the boxes kept him anchored with a purpose even after he was diagnosed with the cancer that took his life in 2018. I realize now that we were both in the grip of an enchanted thought—that so long as we had more boxes to unpack, more work to do, his life, my life, our life together would not be finished. So long as we were learning, laughing, discussing the boxes, we were alive. If a talisman is an object thought to have magical powers and to bring luck, the boxes and the future book they held had become ours.”

Presented Without Comment

CNN: RFK Jr. Campaign Official Attended Jan. 6 ‘Stop the Steal’ Rally and Wanted ‘Favorite President’ Trump to Run for Third Term

Also Presented Without Comment

Politico EU: Switzerland’s Climate Failures Breached Human Rights, Top Court Rules

Switzerland violated its citizens’ human rights by failing to protect them from climate change’s catastrophic effects, Europe’s top human rights court said Tuesday in a ruling expected to reverberate across future lawsuits.

The judgment … came after a trial that saw elderly Swiss women allege Bern wasn’t cutting planet-warming emissions fast enough to avoid climate disasters such as heat waves that disproportionately harm older people.

Toeing the Company Line

• Are we in for a China Shock 2.0? Is Beyoncé’s Cowboy Carter a country album? What do young voters think about the 2024 election? Grayson, Kevin, and John joined Mary to discuss all that and more on last night’s episode of Dispatch Live (🔒). Members who missed the conversation can catch a rerun—either video or audio-only—by clicking here. 
• In the newsletters: Nick argued (🔒) that, despite what politicos are saying, Trump’s abortion positioning could actually matter for voters and GOP lawmakers.
• On the podcasts: Chris Stirewalt returns as guest host of The Remnant and is joined by Austin Tyler Harper to discuss his critiques of the new book, White Rural Rage.
• On the site: Gil Guerra unpacks Ecuador’s raid on the Mexican embassy in Quito and Kevin Kosar explains what a Depression-era farm program shows us about the New Right’s industrial policy. 

Let Us Know

What do you make of Jonathan Haidt’s argument—from the first Worth Your Time—that social media and phone use are behind plummeting youth mental health? Is it alarmism or are his warnings warranted?