The Looming Student-loan Entitlement

Nat Malkus

Summer 2023

As his term has progressed, President Joe Biden has acted more aggressively on student-loan forgiveness than anyone might have expected. Following cues from the loan-forgiveness bidding war that took place during the 2020 Democratic primary and embracing executive authority that both he and mainstream members of his party once shied away from, Biden has taken almost every opportunity to forgive student debt, almost always without congressional approval.

The most obvious example is Biden's proposal to forgive up to $20,000 per borrower in student loans. The Department of Education pegs the cost of this onetime debt cancellation at $300 billion, the Congressional Budget Office at $400 billion, and the Penn Wharton Budget Model's low estimate is $469 billion. In addition to the massive price tag, critics also fault the plan for being regressive and unfair, for incentivizing increased student borrowing, for involving glaring executive overreach, for encouraging colleges to raise tuition, and for failing to address current higher-education prices. The initiative now awaits a ruling by the Supreme Court. But even a defeat at the Court will not be sufficient to curb the administration's ill-advised forgiveness plans.

Not only is Biden more profligate on student-loan forgiveness than expected; he is more so than most Americans realize. The spectacle of Biden's onetime forgiveness plan and its court challenge may have garnered the lion's share of attention, but the administration has taken — and plans to take — far more dangerous steps on student-loan forgiveness.

Since the beginning of the pandemic, the Biden and Trump administrations have forgiven $292 billion in student loans, 81% of which stems directly from the Biden administration's actions. According to the American Enterprise Institute's Student Debt Forgiveness Tracker, which I run, as of June 2023, the pandemic student-loan payment pause alone has cost the federal government $225 billion in forgone revenue — or about $675 for every American man, woman, and child. Beyond that, the Biden administration has increased forgiveness for borrowers in certain classes to the tune of $30 billion while issuing some $42 billion in Public Service Loan Forgiveness (PSLF) since October 2021.

Startling as these figures are, they could be dwarfed by the administration's published plans for a lesser known program called Income Driven Repayment (IDR). Not only could it prove more expensive than onetime forgiveness, and harder to challenge in court, but the systemic and durable changes to IDR will turn the federal student-loan system into a quasi-grant program — one that Congress never authorized.

To understand the Biden administration's efforts on loan forgiveness, we need to zoom out to consider how the president became responsible for a $1.6 trillion loan portfolio. We then need to zoom in to see how, apart from the hundreds of billions already forgiven and the $400 billion in onetime forgiveness awaiting a Supreme Court ruling, it is the regulatory changes to IDR that would fundamentally transform the federal student-loan system and, over time, render it unsustainable.


Loan forgiveness became part of the 2020 Democratic Party platform as a way to respond to rising college costs, borrowers' crippling student-loan payments, and surging student-debt totals. Though concerns about these problems are valid, the data do not neatly support the narrative that took shape around them among Democrats.

As Jason Delisle and Preston Cooper explained in these pages in 2021, politicians pointing to rising college sticker prices have elided concomitant increases in the amounts and distribution of grant aid that have kept the cost of attendance relatively constant, especially for low- and middle-income students. The College Board's Trends in College Pricing and Student Aid 2022 not only bear this out, they show that sticker and net prices have actually fallen over the past five years.

Likewise, borrowers' typical loan payments have remained reasonable. Delisle and Cooper show that typical student-loan payments in 2021 were similar to or lower than they were 10, 20, or even 30 years earlier. Simply put, the dramatic increases in overall student debt have not yielded increased monthly payments, nor have they neatly translated into growing total debt per borrower. Undergraduates' average debt at graduation increased significantly in real dollars between 1990 and 2012, but that figure has since fallen by roughly 10%.

Graduate-student debt has grown far more, and at a more consistent pace, than undergraduate debt; it now constitutes about half of all federal student-loan debt. This is in part because graduate-degree recipients' loans are far larger than those of undergraduates. According to a Congressional Research Service report, after the 2017-2018 academic year, borrowers earning a bachelor's degree owed an average of $27,500 upon graduation — much less than the average debt loads of $71,800 for those earning a master's degree, $112,400 for those earning a Ph.D., and $185,100 for those earning a J.D. or an M.D. Despite these figures, graduate borrowing's share of total student debt remains far larger than its share of the student-debt narrative in our politics.

Thanks in large part to graduate borrowing, aggregate student-loan debt has skyrocketed, from $187 billion in 1995 to over $1.6 trillion today — a 4.4-fold increase in real terms. During that period, growth was fueled by rising costs; rising enrollments; increased borrowing, particularly among graduate students; increased generosity of repayment terms; and increased borrowing limits. Today, student-loan debt represents a larger share of household debt than either auto-loan or credit-card debt; its share is second only to that of mortgage debt.

Student debt could have increased at these rates without the federal student-loan portfolio growing to its current size. Before 2010, the federal government guaranteed student loans, but most were issued and held by private lenders. In 2010, legislation switched all federal loans to the Direct Loan program; since then, 90% of all student-loan dollars have been directly issued and held by the federal government. This change helps explain why today's federal student-loan portfolio is so large, and why the president manages a $1.6 trillion loan portfolio drawn directly from the U.S. Treasury. It also explains why the executive branch has substantial power to act on student loans without congressional approval.

Rising college costs have also been a partial driver of debt over decades, and remain a policy concern even if factors like enrollments or graduate borrowing are more potent. However, the fact that net costs have remained flat, or even fallen, in recent years does not mean they will maintain that trajectory, especially since the Biden administration is radically overhauling the federal student-loan system. Indeed, what is known as the Bennett hypothesis posits that increased student aid will cause price increases. The evidence on this hypothesis is mixed, and the mechanical relationship between the two that many suppose does not exist, but given the perverse incentives the proposed changes create, we need not prove that loans drive up costs to be concerned about the potential for increases in student borrowing or the higher costs of a college education.

Any forgiveness plan should be evaluated on its potential impacts on future college costs and borrowing. Both Biden's onetime forgiveness and IDR plans fail on both accounts. No one, including the administration, is arguing that either will drive down costs, and there are good reasons to expect them to increase. The problems for increased borrowing are more pointed, where Biden's plans include no incentives to minimize, but multiple means to promote, increased borrowing. Other important policy concerns — including fairness, college accountability, student decision-making, and taxpayer burdens — are not getting much attention because the administration has little leverage over them without working with Congress. In contrast, the president can claim far greater unilateral power on loans — and he is using it wherever he can.


Announced at the same time as Biden's loan-forgiveness plan and more formally laid out this past January, Biden's proposed changes to income-driven repayment could ultimately prove more costly and more harmful than either total forgiveness to date or Biden's onetime forgiveness proposal. All three are expensive, but the IDR changes go the furthest toward fundamentally altering the federal student-loan program, turning it into an unsustainable loan-grant hybrid. Insofar as these changes would be politically impossible to reverse, they would function like a new entitlement program — one established without congressional approval.

IDR programs link borrowers' student-loan payments to income and family size to insulate borrowers from unaffordable payments and prevent defaults. After a set period of successful payments, the government forgives remaining balances. IDR has always served as a taxpayer-funded safety net for borrowers struggling under excessive debt burdens and poor outcomes. But the underlying assumption has always been that most loans would be repaid.

Existing in various forms since the 1990s, IDR programs have shown some success in decreasing — but not eliminating — defaults and reducing payments for many lower-income borrowers. Yet they have also come with significant problems. Navigating IDR programs can be complex and confusing, and maintaining progress toward forgiveness has proven unacceptably difficult. Technicalities frequently derail borrowers on track toward forgiveness, while program design flaws allow some borrowers' balances to grow even when they are successfully making payments. Mismanagement by student-loan servicers and the Department of Education has steered some borrowers toward forbearance instead of IDR. Clearly, the program could benefit from various modest reforms. But the Biden administration is promising an overhaul.

IDR programs include three primary components: an income exemption — measured as a percentage of the federal poverty level; an assessment rate — the share of non-exempt income the borrower must put toward repaying the loan; and a term to forgiveness — the period over which a borrower must make successful payments to qualify for forgiveness of the remaining amount. The components of the various programs differ, but the most generous offer an income exemption at 150% of the federal poverty line, assessment rates of 10% of non-exempt income, and a term of 20 years to forgiveness.

Biden's reforms to IDR would make all three components much more generous. Exempted income would increase from 150% to 225% of the poverty line (from $45,000 to 67,500 for a family of four) — below which payments would be zero. The assessment rate would fall from 10% to 5% for undergraduate debt and would remain at 10% for graduate debt, with mixed balances weighted proportionally. For borrowers with balances below $12,000, the term to forgiveness would drop from 20 years to 10, increasing by one year for each additional $1,000, up to a maximum of 20 years for those with only undergraduate debt and 25 years for borrowers with graduate debt. With these changes, a family of four with an $80,000 income and only undergraduate debt would pay nothing on the first $67,500 it earns due to the exemption and 5% on the remaining $12,500. This comes out to $625 per year, or $52 per month.

The problems these changes pose do not result from any single shift, but from shifts to all three components at once. These concurrent changes will not only make IDR far more generous and expensive, they will fundamentally alter the nature of the program.


Today, IDR operates as a safety net helping relatively few borrowers. Under current rules, a cohort of 2017 graduates might see substantive relief from IDR. About 62% of IDR participants with typical debt relief levels (about $13,000) who earned certificates or associate's degrees would pay off their loans. Their peers who earned bachelor's degrees had higher debt levels (about $31,000) but a similar percentage, 59%, would pay their loans in full. For both groups, about 12% would pay nothing. These relatively generous rates are consistent with the idea that IDR is a safety net. Biden's changes are not.

In a January report from the Urban Institute, Jason Delisle, Matthew Chingos, and Jason Cohn examined what might be forgiven for these borrowers with typical debt burdens under the proposed changes. Under the new IDR program, only 11% of borrowers who earned a certificate and associate's degree, and 22% of borrowers who earned a bachelor's degree, would repay their loans in full. That is far less than the roughly 60% who do today. More shockingly, they estimate that 69% of certificate and associate's degree holders with typical debt would repay less than half their loans, while 38% would pay nothing. This forgiveness amounts to over $6,500 for those repaying less than half their loans and the full $13,000 per borrower for those who pay nothing. Among borrowers who earned bachelor's degrees, 49% would repay less than half their loans while one in five would pay nothing, leaving taxpayers on the hook for over $15,500 and $31,000 per borrower, respectively.

Benefits of the new IDR rules would rival or exceed the federal Pell Grant program, which provides need-based grants to low-income undergraduate and some graduate students. Delisle, Chingos, and Cohn found that Pell Grant recipients borrowing to earn a certificate or associate's degree would repay $357 of a $12,000 loan — a benefit of $11,643, which exceeds the typical Pell Grant these borrowers would receive. Those pursuing a bachelor's degree who borrow and receive Pell Grants would see $18,644 of a $30,000 loan forgiven — which again exceeds median Pell Grant totals.

The federal student-loan program was not intended to be a grant program rivaling the size of Pell Grants. Quite simply, Pell is a grant program, while federal student loans were designed to be a loan program. No lender would operate as generous a program as the one described above, and Congress never intended to create one.

Repayment ratios tell a similar story. For every $1 borrowed, borrowers enrolled in a standard plan will repay $1.19 on average. That sounds like a loan program. According to Brookings scholar Adam Looney, however, White House estimates suggest that under the proposed changes IDR participants will pay back an average of $0.71 for every $1 borrowed. Similarly, the Penn Wharton Budget Model estimates they will pay back $0.63 for every $1 borrowed. These benefits effectively turn the student-loan program into a quasi-grant program.

Future IDR program costs are difficult to pin down because the more generous benefits will likely increase both enrollment in IDR and the average amount borrowed, both of which would increase costs. Under any realistic estimate of that growth, however, the costs will be astronomical. The Biden administration estimates the cost of its IDR changes at $138 billion over 10 years, but that figure depends on the unreasonable assumption that enormous changes in borrower incentives will not change loan-program participation or borrowing rates. The Penn Wharton Budget Model predicts that IDR take-up rates "will increase from 33% to between 70% to 75% of eligible loan volumes," costing between $333 billion and $361 billion over 10 years, or roughly 250% of the Biden administration's estimate. Still higher but plausible take-up rates would drive costs even higher: A 91% take-up rate would cost $471 billion over that same 10-year period.

But even these figures likely underestimate the total costs. The Penn Wharton Budget Model only accounts for increases in the number of participants, not for increases in how much participants borrow. It is reasonable to expect that once borrowers understand that four in five of them will have some of their loans forgiven and one in five will have all forgiven, they will borrow greater amounts.

Indeed, the new IDR rules create financial incentives to take out larger loans. Delisle, Chingos, and Cohn find that the typical community-college student would end up paying back only $957 if he borrowed $4,000. If he instead borrowed $12,000, he would still only repay $957. These incentives to borrow could be tempered by federal borrowing limits for undergraduates, but average borrowing could roughly triple without exceeding those limits.

If we take these increases in borrowing into account, it becomes easy to see that the costs of IDR could explode. The Penn Wharton Budget Model has estimated that IDR could cost around $500 billion over a 10-year period — a total that would exceed the cost of Biden's onetime loan-forgiveness plan. Furthermore, at roughly $50 billion annually, federal spending on IDR would be twice the cost of the Pell Grant program. This far outstrips what Congress had in mind when it introduced IDR. Originally, IDR (and PSLF) were expected to cost about $8 billion over a 10-year period. Moving forward with proposed changes, IDR could cost 45 times as much in real dollars.

Aside from the massive costs, another limitation of the proposed IDR changes is that they only focus on a single issue: borrower's student-debt burdens. One could argue the benefits of these changes are worth the expense, but we also have to grapple with potential negative consequences. If IDR were hashed out in the legislative process, related concerns about college costs, program quality, benefit distribution, borrowing incentives, taxpayer burdens, and the sustainability of the federal loan program would receive due consideration. Instead, since IDR changes are coming from the executive, these concerns have not received the attention they merit.

Nonetheless, the administration is forging ahead. Insisting he has the authority to make these changes, Biden would rather act where he can than push for congressional action that is not likely forthcoming — or at least not to his liking. Whether the president has the authority to make such far-reaching adjustments will ultimately be a question for the courts, but the policy drawbacks for future borrowers, institutions, and the system as a whole are worth examining.


For institutions and future borrowers, Biden's IDR reforms create undesirable incentives, many of which run counter to the purpose of IDR. When aggregated across the country, they pose serious long-term challenges for the entire higher-education financial system.

For starters, Biden's IDR changes will provide a lavish safety net for students whose incomes do not benefit from a college education, and create indirect subsidies that will primarily benefit the institutions and programs offering students the least economic value. The price of their poor performance will not be paid by graduates or the institutions, but by taxpayers. Worse still, students who enroll in programs that pay off will end up paying their own debts, while many students in programs that fail to generate a good return on investment will not. IDR should help students who get a poor return on investment, but not by subsidizing the colleges responsible — especially at the taxpayer's expense.

Moreover, as Adam Looney points out, IDR changes will undermine existing accountability structures. Currently, programs with higher student default rates can lose eligibility for federal grants and loans, which sets a floor on program quality. However, the proposed IDR changes would automatically enroll borrowers who default, thereby artificially depressing default rates and allowing lousy programs to earn indirect subsidies while avoiding scrutiny.

These reforms would not only reward poor enrollment choices, they would make enrollment decisions more complicated by reducing students' price sensitivity. An effective but minimalist safety net would have a marginal effect on those decisions; one generous enough to affect the large majority of borrowers and almost a third of loaned dollars will have a much more significant impact. In a market where enrollees must weigh the total cost of attendance — including tuition, fees, and room and board — added complexity generated by outsized insurance against poor enrollment choices can only make those decisions more difficult.

IDR changes also create added incentives for students to enroll in more expensive programs and, in turn, take on more debt. IDR forgiveness depends on borrowers' incomes, but its structure ensures that borrowers with the largest loan balances — typically those from graduate programs and expensive undergraduate institutions, all of whom have ample earning potential — will have the most loan dollars forgiven. Higher payoffs for higher balances results in a means-tested IDR program that can seem progressive yet still send far more dollars to relatively advantaged borrowers: The associate's degree holder who borrows $4,000 and later has it all forgiven may be more common than the graduate student who borrows $80,000 and sees only half forgiven, but forgiveness for the latter will be 10 times larger than the former.

The generosity of these IDR changes also creates opportunities for arbitrage. Simply put, when the average student pays back $0.60 for every dollar borrowed, savvy borrowers may take advantage of a healthy probability of not repaying. As Looney has argued, there is ample room for increased individual borrowing vis-à-vis loan limits. When about half of student borrowing is not for tuition but for living expenses, it is dangerous to create a program that incentivizes excess borrowing because some or all of it may never be paid back. We might put our trust in borrowers' own sense of propriety on such matters, but policymakers should anticipate what any honest financial advisor would tell students: Borrow to the limit.

This arbitrage will not be limited to individual borrowers. Many expensive law schools have developed Loan Repayment Assistance Programs (LRAPs), which hinge on federal forgiveness programs (so far primarily PSLF). Matt Bruenig of the People's Policy Project explains the four step process: "1. The school increases their tuition. 2. The student takes out federal loans to cover the tuition increase. 3. The school squirrels away the debt-financed tuition increase into an LRAP fund. 4. The school disburses money from the LRAP fund to cover PSLF repayments." In so doing, these schools can effectively use loan dollars to pay off students loans, and federal forgiveness can make law school free, or close to it, for many borrowers. This institutional gamesmanship can easily be tailored to new IDR rules, and will almost certainly spread.


Rising student debt and college costs are two of the existing student-loan system's root problems, and drive calls for forgiveness. However, both of these problems will be exacerbated by the White House's IDR changes.

The new IDR system adds no incentives to reduce overall student borrowing moving forward, but plenty to increase it. Simply put, minimizing the downside risks of borrowing will increase individual debt loads and, in turn, total loan volume over time. Undergraduate borrowers face federal loan limits that can mitigate this risk, but they typically only borrow about a third of the maximum, meaning that many still have room to borrow much more than they currently do. Enticing undergraduates to take on larger loans because of the increased potential for forgiveness under the new IDR rules could further increase debt totals.

Graduate students pose a bigger liability. Their share constitutes about half of all federal student-loan debt, in part because they can borrow up to the full cost of attendance, i.e., tuition, fees, and living expenses. Given that the amount and likelihood of forgiveness increases with higher debt loads, these incentives will push more graduate students to become borrowers and graduate borrowers to borrow more money.

What might more borrowing mean for college prices? One need not subscribe to the Bennett hypothesis to see that decreasing the cost of borrowing could push prices higher. In turn, increased tuition could beget still more borrowing, generating a decidedly unvirtuous cycle.

IDR is not only a safety net for borrowers for whom college has not paid off; it is also a response to rising student debt totals (what some might call the "student debt crisis"). However, Biden's profligate generosity will make matters worse. While IDR changes will act as a relief valve for the burden some borrowers bear, the price of college could easily rise, and aggregate student debt surely will. Someone will have to pay for the increase in total debt taken on and the cost of operating the federal student-loan portfolio. That someone will be the American taxpayer.


Politics is an important factor when discussing federal loan-forgiveness policies, and the long odds of forthcoming congressional action that might include forgiveness — and potentially address college costs, quality, and accountability — are a political reality. In fact, Congress's reluctance to tackle the issue is pushing the Biden administration to take administrative action where it can: on the $1.6 trillion dollar loan portfolio it oversees. Once the administration enacts its new IDR rules, the calculus will flip; political realities will make it nearly impossible to reverse the changes.

Of course, from a procedural perspective, a future president of either party could rescind the changes as easily as Biden is enacting them. There may be compelling reasons to do so, as I have detailed above, but the salience of those arguments will be weak for the average voter and far more animating for those who stand to lose potential benefits. Just as opponents of forgiveness today question why newer borrowers won't have to pay off their loans while those in the past did, future opponents of rescinding the IDR changes would question why new IDR enrollees deserve less advantageous terms than the current cohort.

Even if Biden's IDR changes could be rolled back to more sustainable repayment terms, the move would likely affect only new participants. Everyone enrolled in IDR before the rollback would likely retain the highly advantageous terms they enjoyed or enrolled under, as it would be exceptionally difficult to claw them back. Given that about half the volume of the direct federal student-loan portfolio is held by borrowers in an IDR plan, this would represent a sizeable chunk of the voting population.

Congress could also counter the IDR changes through legislation. However, the same political headwinds confronting a future president, coupled with Congress's current dysfunction, make this even less likely. And even if congressional action were forthcoming, adjusting an overly generous set of existing IDR regulations would likely beget a far more generous program than would any equilibrium resulting from the current state of affairs.

That leaves the courts. As with the loan-forgiveness case pending before the Supreme Court, a legal challenge to new IDR rules is not certain to succeed. Yet such uncertainty stems from challenges that differ from those confronting the current case.

In the case now pending, standing is a crucial hurdle for complainants to overcome, while the merits pose significant obstacles for the administration. The administration claims that the HEROES Act of 2003 allows the secretary of education to "waive or modify" loan terms in a national emergency, thereby granting him the authority to provide blanket forgiveness during a pandemic. In oral arguments, several justices seemed suspicious of that authority. But the more serious issue of standing has to be cleared before those merits can be heard.

In an IDR suit, those dynamics may flip. Given the threat that the proposed IDR changes pose to their business model, some private lenders and loan services would likely have standing and, despite potential public-relations problems, the willingness to sue. Yet on the merits, the administration's asserted authority over IDR programs is arguably grounded in precedent. In 2011, the Obama administration issued a memorandum launching the Pay As You Earn (PAYE) program to extend income-based repayment (IBR) programs to more borrowers. Then in 2014, it issued another memorandum revising the PAYE program to reduce IBR terms from 15% to 10% of discretionary income and forgiveness terms for undergraduate loans from 25 to 20 years. Biden's IDR changes are similar to these unchallenged administrative actions, just much further reaching.

This coming reality is out of line with the intent of Congress. Consider the hypothetical that Bernie Sanders — who proposed a free college plan and forgiving all federal student debt when pursuing the Democratic nomination for president — had become president. Would he have had the authority to alter IDR to exempt income at five times the poverty line, limit payments to 2% of income over the exemption, and forgive remaining debt after a single year of payments, effectively enacting his campaign promises through IDR? Of course not, because such changes would fundamentally alter the federal student-loan system. These hypothetical changes are the same kind Biden is now pursuing, just to a more extreme degree.

An IDR suit could come down to the major-questions doctrine, which holds that when administrative agencies assert extraordinary authority of "economic and political significance," courts should "hesitate before concluding that Congress meant to confer such authority." The question of whether Biden is overstepping the executive's authority may come down to whether the Supreme Court sees the new IDR rules as changes to the student-loan system in degree or in kind.


By definition, a loan program hinges on the expectation of repayment; grant programs have no such expectation. Congress never intended to create a program that would convert student loans to grants through forgiveness. But President Biden's IDR changes would do so, thereby fundamentally transforming the student-loan system into a hybrid loan-grant system whereby even average borrowers would receive some forgiveness while a substantial portion of loan dollars would functionally turn into grants.

If implemented, the administration's proposed IDR reforms would be disastrous. They threaten to further complicate students' enrollment decisions, exacerbate the root problems of rising student borrowing and college costs, cost the U.S. Treasury a billion dollars each week for the foreseeable future, and create a functional entitlement program whose costs will prove difficult to control — all without congressional authorization. They should be halted or revised. There are three clear paths to doing so.

The first would be for the Biden administration to scale back its plans. Meaningful reform could still include parts of the current plans, such as adjusting one of the three proposed repayment factors and halting interest accrual for borrowers whose low payments force them into negative amortization and growing balances. Raising the income exemption might be the best choice, as doing so would deliver the greatest benefit to the lowest-income borrowers while still reducing monthly payments for many middle-income borrowers. Of course, negotiating these options would best be done through the admittedly grueling legislative process, but scaling back the administrative changes would be better than going for broke.

A second solution would be for Congress to assert its authority on the matter. Congressional committees could craft legislation that considers not just loan forgiveness, but college costs, institutional accountability, risk-sharing, and the dozens of other elements that should be part of a complete federal approach to financing higher education. The framers designed Congress to enable our representatives to negotiate trade-offs between policy options and the costs to taxpayers; its inability or unwillingness to do so provides the president with strong incentives to act unilaterally.

The third and most likely path is through the Supreme Court. While there are legitimate arguments for the Court to intervene, this is the least productive option. The Court's capacity to act is quite limited, and rightly so. Rolling back executive overreach is a far cry from crafting balanced policies that will protect borrowers and taxpayers.

The administration's IDR plans may not match precisely what President Biden wants to do on higher-education policy; they are instead a product of what he can do as the administrator of an enormous and growing $1.6 trillion student-loan portfolio. The poorly defined authority Congress has granted the executive on this matter will remain a problem so long as our legislature leaves it up to this and future presidents to explore the limits of that authority.

In the short term, all signs point to the president doing just that, without going through the frustration of the legislative process. Traversing the latter path is certainly more difficult than deploying the administrative state, but it could lead to a more comprehensive, coherent solution to the problems facing borrowers and the student-loan system as a whole. Such a solution may be less generous than the president desires, but it would have the advantage of garnering the consent of the people's representatives.

Nat Malkus is a senior fellow and the deputy director of education policy at the American Enterprise Institute.


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