South Carolina AG Battles Joe Biden’s Unconstitutional Loan Forgiveness Program
Last year, president Joe Biden’s student loan forgiveness plan was resoundingly struck down by the U.S. supreme court. However, despite framing his campaign and presidency as a fight to save democracy, Biden announced the same day as the ruling that he would ignore the nation’s highest court and find another way to forgive as many student loans as possible.
Within days, his administration launched the “SAVE” program, which turns the traditional student loan repayment system into a mass forgiveness program that will cost South Carolina taxpayers and those nationwide at least a half trillion dollars. Hardworking South Carolinians who paid off their loans – or avoided them entirely – will now be forced to repay others’ loans.
Unlike the original one-time forgiveness program, this new effort will be permanent. And because forgiveness is tied to a college borrower’s income, it will provide the largest forgiveness to the most expensive colleges in expensive cities that do the worst job at preparing students for the workforce. These incentives will encourage colleges to raise prices further and – because students can borrow for living expenses (not just tuition and books) – it could be abused as a new welfare program.
Despite the successful effort by states to stop the original forgiveness program last year, it looked like the SAVE program would go unchallenged. The Cicero Institute focuses on state policy in South Carolina and elsewhere and has been sounding the alarm over this unconstitutional and wildly reckless plan. South Carolinians should be proud that attorney general Alan Wilson has answered the call.
Along with numerous other states, South Carolina will be bringing a case that could soon make its way to the supreme court. If successful, it could save taxpayers hundreds of billions of dollars and prevent the state’s colleges and universities from being forever broken by strong incentives that, incredibly, prioritize low-performing and expensive programs over ones that are affordable and prepare students for later life.
The multi-state challenge rightly points out that Biden administration officials were careless in creating the SAVE program and failed to estimate its cost correctly. They ignored legitimate questions about the program’s fairness and constitutionality. And, as the complaint notes, the president “openly boasted about his defiance of the supreme court.”
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