With last week’s long-awaited announcement forgiving the debts of certain student borrowers, President Joe Biden hopes to give Democrats a boost in this fall’s midterm elections. Whatever the short-term political gains, the decision is a costly mistake—and one that the administration will almost certainly come to regret.
Biden’s plan cancels $10,000 in federal student-loan debt for borrowers with annual incomes of $125,000 or less, or $250,000 for married couples. Students who received Pell Grants, which help low-income families pay for college, will have up to $20,000 forgiven. Biden also extended the freeze on loan repayment for all borrowers through the end of the year—the seventh such extension since the start of the pandemic.