President Joe Biden's plan to cancel as much as $20,000 of student loan borrowers' debt is a "dreadful policy" that leaves taxpayers responsible for paying off bills and will likely result in universities and colleges raising prices, economist Stephen Moore said on Newsmax Thursday.
"I feel very strongly that if anybody is going to be on the hook for this unpaid student debt, it should not be taxpayers," Moore said on "National Report." "It should be the universities themselves who ripped off these families. I just looked at the numbers. They have $600 billion to $700 billion of endowments. Tax those endowments rather than taxing you and me."
Moore added that the "single greatest financial scam in America over the last 30 years is the outrageous increases in tuition that these fat and happy universities are charging our families ... then they're having the kids get these loans, and sometimes they graduate from college with six-figure debts of $100,000 or more."
Biden's plan calls for forgiving $10,000 of debt for borrowers who did not also use a Pell Grant for school and $20,000 for those who used the grants while extending the loan deferment period through the end of this year.
Moore said that strategy does not solve the "systemic problem, which is the constant raise of tuition prices, the raising of [prices] for on-campus housing."
Further, he said that if there is nothing to guarantee that universities won't raise their prices by another $10,000 when a loan for that amount is forgiven.
"Every time we have increased the generosity of the student loan programs in the name of making college more affordable, we've made college less affordable," Moore said. "As soon as student loan amounts go up, they simply raise their tuitions, and that puts a real financial squeeze on the people who aren't taking loans and paying out of pocket."
Meanwhile, the plan will make the nation's inflation worse, because it means "more government debt, more printing of money" and it "incentivizes the universities to raise their tuitions," Moore said. Moore, a senior economic adviser to former President Donald Trump, added that the policy is flawed, and people are angry about it.
"They're furious about this because it strikes normal Americans as just being unfair," Moore said. "It's unfair to the people who did pay their loans. It's unfair to the taxpayers, especially the ones who never went to college.
"Now they have to pay higher taxes for the kids who did go to college and the deadbeats, and I'm going to use that term. If you don't repay your loan, you're a deadbeat."
As an economist, Moore said it irritates him when Washington D.C., officials "punish virtue," and in this case, "we're rewarding the people who are the bad actors who have not paid back their loans … and then we're punishing people like my wife who saved after she got out of college from her paychecks. She wasn't rich by any means, and she did the right thing. She repaid her loan, and now she looks like she's the chump."
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Sandy Fitzgerald ✉
Sandy Fitzgerald has more than three decades in journalism and serves as a general assignment writer for Newsmax covering news, media, and politics.
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