Concerns regarding the validity of Biden's student debt relief program as well as its impact on the economy have been raised. 


University and college tuition has dramatically increased in the past 40 years. The average price of tuition, fees and room and board have increased by 169% between 1980 and 2020, according to a report from Georgetown University Center on Education and the Workforce. Today, $3.57 is worth what $1 was in 1980, and according to the National Center for Education Statistics, the average cost of tuition and fees for 4-year public institutions then was $1,513; in 2021 it’s $9,400 — 6.21 times as high. This demonstrates that university and college tuition has outpaced inflation by 74%. 

On Aug. 24, President Biden announced a federal student loan debt relief program that would directly forgive $10,000 in student loan debt for individuals who earn less than $125,000 a year or families who earn below $250,000 a year. Additionally, this program forgives $20,000 in student loan debt for pell grant recipients and extends the moratorium on student loan repayment to Dec. 31. Furthermore, Biden announced plans to lower monthly payments for undergraduate student loans; fix the Public Service Loan Forgiveness program, which serves to forgive student loan debt for those who enter careers in the military, government or nonprofits; and reduce the price of college. Biden also mentioned his intent to continue to fight for free community college, a proposal that was eliminated from the eliminated from the Build Back Better bill earlier this year.

This action by President Biden will offer much needed relief to many borrowers, however, this is just the first step in addressing heightened tuition rates and overwhelming student loan debt.

By announcing this action, Biden is fulfilling a campaign promise, and its strategic timing may be in hopes of boosting Democrats’ chances of retaining seats in state and federal legislatures during the midterm elections. The White House claims 43 million borrowers will be eligible for student loan debt relief, and 20 million of those could have the entirety of their student loan debt forgiven. The Wharton School of Business at the University of Pennsylvania estimates the price of sweeping student loan debt forgiveness could reach up to $519 billion over 10 years, costing approximately $2,000 per taxpayer, according to the National Taxpayer Union. It remains unclear how the federal government intends to foot the bill of student debt relief, whether the country assumes the debt, raises taxes or secures funding through other means.

“[Student debt relief] allows us to provide real benefits for families without meaningful effect on inflation,” Biden said in the Aug. 24 announcement. “Let’s be clear, I hear it all the time: ‘How do we pay for it?’ We pay for by what we’ve done. Last year we cut the deficit by $350 billion.” 

The U.S. Department of Justice (DOJ) released an opinion on Aug. 23 defending the legal ground with which the President justifies the unprecedented, widespread forgiveness of student loan debt. The DOJ sited the Higher Education Relief Opportunities for Students (HEROES) Act of 2003, which authorizes the Secretary of Education to “waive or modify any statutory or regulatory provision applicable to the student financial assistance programs” for some affected individuals, including those serving in the military or National Guard, living in “disaster areas” because of a national emergency or those who experience economic hardship because of a war, military operation or national emergency.  

Biden is using the pandemic, a national emergency, to fulfill the requirement of the final stipulation of the HEROES ActIt’s possible that Biden’s federal student loan debt relief program will exercise a chilling effect on high tuition rates, and it will certainly provide some breathing room for borrowers. 

There are concerns, however, that Biden’s student loan debt relief program could be eventually brought before the Supreme Court to determine its validity. Some argue that COVID-19 isn’t a strong enough reason to allow direct action by the executive branch and, therefore, any action on these grounds requires passage through Congress. This was the case in the Supreme Court decision on Alabama Association of Realtors v. Department of Health and Human Services, where the Center for Disease Control and Prevention’s (CDC) establishment of an eviction moratorium because of the pandemic was struck down. Others have voiced concern that Biden’s student loan debt relief program will fuel already high inflation rates

Others have voiced concern that Biden’s student loan debt relief program will fuel already high inflation rates. 

Zachary Gochenour, an economics lecturer at JMU with expertise in political economics, said that compared to the scale of the U.S. economy, Biden’s plans to relieve student loan debt are just a drop in the bucket. Although the executive branch’s actions can influence the economy, it likely won’t result in dramatic fluctuations.

“The economy is huge,” Gochenour said. “If you take all of the government spending altogether with all of the different areas … it’s still not most of the economy, most of the activity is in the private sector.” 

Forgiving debt alleviates a financial burden on borrowers and encourages them to spend more money, which can be an inflationary pressure. The burden of paying off student loans is transferred from the individual to the government and distributed among taxpayers. This transfer of debt can increase the ability of some people to spend money while reducing that ability for others, which can result in deflation. Determining how Biden’s student loan debt relief program will impact the economy can be challenging. 

“In terms of inflation and deflation, it depends on how they [the federal government] play it … If they say we need to increase taxes, then people might spend less money,” Gochenour said. “The rate of inflation has to do with not only the amount of currency but also the rate at which people spend it. If nobody spends anything … there will be deflation.”

This action by President Biden indicates to universities and colleges that the executive branch believes current tuition rates aren’t manageable for many people and that the government is obligated to intervene. Biden continue fighting for more reasonable tuition prices also threatens universities’ ability to set high tuition prices in the future. However, universities aren’t immediately affected by Biden’s student loan debt relief program because they aren’t losing any money as a result. 

However, preventing universities and colleges from driving up prices and marketing to adolescents in the first place is important to finally resolving the issue of overwhelming student loan debt. Credit and debt are important tools that can accelerate advancement.  Assuming the risk of taking on debt is a decision that should be carefully considered, and government forgiveness of debt should be reserved for emergencies. Frequent forgiveness of debt may result in people taking this decision less seriously and the assumption of more debt with the intent of relying on the government to resolve it. Considering this, universities and colleges would have little reason to reduce tuition rates.

“We’re not actually addressing the problem,” Gochenour said. “Schools will think that there is no reason to cut back, if it’s a problem they’ll [the federal government] just relieve the debt. No one’s intention is to do that … They want to give relief to people who are struggling.”

Universities and colleges may anticipate future action by the government to reduce the price of higher education and respond to it by reducing tuition costs. More likely, they’ll maintain high tuition until the government forces them to adjust in order to maximize profit. Factors such as declining enrollment figures demonstrated by a 2022 report from the Nation Student Clearinghouse Research Center, showing enrollment declining 4.1% this year following a decline of 3.5% last year, are more likely to encourage universities to lower their tuition in the future. 

To address ballooning tuition rates in American universities and colleges, the federal government must take more direct action preventing institutions of higher education from increasing their prices. This is especially the case for public universities who operate in part on taxpayer dollars and to serve as a pathway to advance them financially and enhance their quality of life, not to debt and despair. 

This action will be helpful for many people, and concerns regarding inflation and deflation are likely overemphasized. This action doesn’t, however, solve the student loan debt problem in the U.S and doesn’t prevent more debt from being accumulated in the future. The government’s use of the pandemic as justification hopefully indicates this measure won’t be regularly utilized, avoiding a precedent that could easily be exploited. Ultimately, this action is a temporary fix that’ll be beneficial to many — as long as the government continues to search for a more permanent solution to the problem.

 Contact junior English major Evan Weaver at weavereh@dukes.jmu.edu. For more editorials regarding the JMU and Harrisonburg communities, follow the opinion desk on Instagram and Twitter @Breeze_Opinion.