The United States Supreme Court has struck down the Biden administration's $400 billion student loan bailout in response to a legal challenge by Job Creators Network Foundation. This ruling sets the stage for long-overdue bipartisan action to address the underlying reason for this debt crisis: unaccountable colleges that have raised tuition by more than double the inflation rate over the last generation.
The court ruled that the cancelation program was a clear act of executive overreach, a position that both President Biden and Nancy Pelosi have taken in the past. Congress neither authorized broad student loan forgiveness nor indicated intent to do so. In fact, Congress has repeatedly rejected student loan cancelation bills in recent years. The president is not a king and cannot usurp lawmakers' authority.
With this ruling, the Supreme Court has protected hardworking Americans who have paid back their student loans or never went to college from having to unfairly cover the college debt of others.
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A student debt jubilee would have let colleges off the hook for their role in this crisis and given them a blank check to keep on raising costs, secure in the knowledge that the federal government will step in when debts get out of hand. Lawmakers can now begin to address the problem's root.
The average annual tuition at private, nonprofit universities has grown to $50,000. As a result, American colleges are sitting on $700 billion in endowments. They are taking advantage of their "nonprofit" status and favorable opinion from Democrats and the media to price gouge ordinary Americans.
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A lot of fat can be cut from colleges and returned to students through lower tuition. For instance, colleges have hired an army of high-paid administrators that provide little to no educational value. Some colleges now have around the same number of administrators as students, and most have more administrators than faculty.
College sports coaches can make more than $10 million per year, and college presidents can make over $1 million.
This begs the question: Have colleges become glorified jobs programs funded by students and taxpayers?
Colleges have launched dozens of expensive humanities degree programs that don't provide students with marketable skills. These sociology-adjacent majors generally teach postmodernism, identity politics, and a victim mentality that leave students unprepared to succeed in today's competitive economy. British Prime Minister Rishi Sunak has vowed to end such low-value degrees in his country.
Colleges have also engaged in a decades-long building boom that has added expensive resort-style amenities to campuses. Features like state-of-the-art dorm rooms, lecture halls, and sports facilities don't improve learning but cost a lot of money for students and taxpayers. These aren't the college campuses you remember attending.
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Under the status quo, where the federal government backs all student loans, there's little check on such college profligacy. Yet smart reforms can reverse runaway college tuition and spending.
Recent legislation introduced by Senate Republicans helps get to the root of the problem by imposing student loan transparency and eliminating inflationary Graduate PLUS loans, but more needs to be done.
Broader reforms such as requiring colleges to take over some responsibility for making student loans will incentivize them to ensure students don't take on too much debt and graduate with skills to succeed. Talk about a win-win.
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Democrats have long stood against price gouging, institutional greed, and preying on vulnerable folks. They can do so again by joining with Republicans to take on the college cartel. Many top Democrats, such as Sen. Elizabeth Warren, have railed against corporate excess, and they should stay consistent by also calling out colleges.
Thanks to the court's decision, lawmakers can now come together to finally reduce escalating college costs burdening so many. Everyone agrees student loans are a crisis. It's time we all identify colleges as the true culprit and pursue bipartisan reform to hold them accountable.
Elaine Parker is president of the Job Creators Network Foundation.
