Biden’s Student Loan “Forgiveness”: Compassion or Corruption?

April 11, 2024

Host: Hon. Sam Rohrer

Guest: Constitutional Attorney David New

Note: This transcript is taken from a Stand in the Gap Today program originally aired on 4/11/24. To listen to the podcast, click HERE.

Disclaimer:         While reasonable efforts have been made to provide an accurate transcription, the following is a representation of a mechanical transcription and as such, may not be a word for word transcript. Please listen to the audio version for any questions concerning the following dialogue.

Sam Rohrer:       Hello and welcome to our bimonthly Constitution and American history focused program here on Stand in the Gap today, this Thursday, April 11th, 2024. As any alert American knows and I know all of you listening to me will fall into that category, you are alert. Otherwise you wouldn’t be listening to the program. Americans and frankly, the entire world are being subjected to the most, these are my words now, torturous and bizarre presidential election cycles we’ve ever witnessed. Torturous because there are more lies and deception and slights of hand embedded within the cleverest use of controlled media, and I’m going to say equally controlled alternative media that this world has ever seen and bizarre because it seems that the entire process on both sides have become lawless, capricious and more like a banana Republic than the founder’s American Republic. This is truly more of an anything goes and anything could happen in this election than I think I’ve ever seen or read about.

Sam Rohrer:       And while I could go on and on, the purpose for today’s program is not to cite the irregularities and the uncertainties of this particular 2024 presidential election slug fest or the fact that the inordinate flows of campaign fund raising have effectively destroyed the integrity of not only the federal elections because of the volumes of money, but is literally destroying our critical state and local elections in our various 50 states, which are so important by literally dominating even local media and drying up campaign funds needed by these local officials. There’s a lot happening and it seems that instead of electing a president, we’re more like selecting a king and instead of an independent Congress sworn to keep a balance of power with the executive branch, we’re more like nominating a consortium of bribed officials who together with the executive branch coordinate and align their authority to abusively, undermine the constitution and enable the fast approaching global government.

Sam Rohrer:       Think about it. We don’t have time to go in. Again, all that, and again, say the purpose for today’s program is not to discuss the election or these things since I hope to do that in a future program. However, we do want to focus on one aspect of election strategy being arrogantly and shamelessly advanced by Joe Biden and his campaign efforts, which reflect a strategy of what I’m going to call undiluted immorality and lawlessness far more than anything that looks like duty or fidelity. Now, that particular strategy that we’re seeing manifested very recently in a very abusive way is the effort to buy votes. You say, how’s that? Well buy votes by forgiving, so to speak, vast amounts of student loans. Okay, here’s the issue for today. Today, recurring guest constitutional attorney, David New and I are going to discuss this matter of student loans in this segment, identify what they are and the size of those outstanding and unpaid loans.

Sam Rohrer:       Segment two we’ll learn about the role of Congress in beginning the student loan program and why it was started. Segment three we’ll considered this concept of forgiveness of these loans by Joe Biden or frankly any president and what the courts say and the underlying constitutional considerations. Then segment four will consider the extraordinary moral implications of what Joe Biden’s exploitation of this massive debt in his efforts to buy votes is producing. The title I’ve selected for today’s program is this Biden’s Student Loan, forgiveness, compassion, or Corruption. And that’s the question. So David, wow, what a theme to go over, but thanks for being with me today.

David New:         Well, it’s nice to be with you and everyone with us. Blessings to everyone.

Sam Rohrer:       Alright, David, let’s get right into this. You’ve got some firm thoughts on this as well as I do, and some of mine I’ve already expressed, but everyone listening today I think have certainly heard of the Federal Student loan Program, likely many listening who’ve gone to college or have their sons and daughters or grandchildren have possibly utilized this low cost loan to some degree or another. But here’s the question for the moment, I’d like you to describe the size of this student loan debt now owed to the federal government being carried on the federal government’s balance sheet in the student loan category.

David New:         Well, it’s an enormous debt and I prefer, I know they call it student loan forgiveness, but I think that’s a little bit deceitful. I think a better phrase to use is student loan transfer because what he’s doing, he’s transferring the debt from one person and giving it to another person. So student loan forgiveness, people love to hear things like that because Americans like to forgive about lots of things, but when they really see what it is, it’s really a transfer. It’s going from whoever borrowed the money to you that it becomes a little bit more clear.

Sam Rohrer:       Yes, it does. And David, here, I’m looking at the US debt clock as of today. Great place to go for the factual debt size, but the total debt, ladies and gentlemen in the student loan category is 34.67 because it keeps going up trillion dollars, average student loan debt is thirty eight, nine hundred and twenty seven, so just about $39,000. Alright, that’s the magnitude of this. And David, I think you’d put together some numbers of how many students are actually involved in having loans, and here’s just the thought as we wrap up this segment. The numbers have grown. It has continued to grow leaps and bounds. Why has it grown so high? How many students are borrowing and why do you think it’s grown and continuing to grow so large?

David New:         Yeah, I think you meant national debt. The national debt is around 34 trillion. Student loan debt is 1.6.

Sam Rohrer:       You are totally correct. I was wrong. That’s correct. 34.7 is US total debt. Student loan is 1.7. Thank you.

David New:         Now out of that 1.6 trillion debt that students owe, President Biden so far has canceled 144 billion. He’s wiped out the debt for 4 million students. They don’t have to pay their debt anymore. Now that amounts to about 9% of the 1.6 trillion federal student loan debt. So he’s done 9% already. He tried to do more last year, but he didn’t get away with it. Now why has it grown so much? It’s real simple, ladies and gentlemen. Whenever the government subsidized something and guarantees a payment, if the other guy defaults, the government guarantees a payment. That means you’re going to get a lot more of that item than you otherwise would

Sam Rohrer:       Great. There you go, David, just hold it right there, ladies and gentlemen. That’s it. Whatever government subsidizes, they get more of. Alright, you subsidize loans, you’re going to get a whole lot more loans. When we come back, we’re going to go and say, all right, now we’ve got this student loan issue. Biden wants to cancel $1.6 trillion. Where did it start? We’ll go to Congress and see what they did.

Sam Rohrer:       If you’re just joining us program today, this is our bimonthly constitution and we call it Constitution, American history Update because we always work a little bit of both into that. David New constitutional attorney, author and public speaker on this program, always in this emphasis, and I know you like because we deal with things that are well in the news and what we’re dealing with today is that our theme, Biden Student Loan, Forgiveness: forgiveness, compassion or corruption.

Sam Rohrer:       So student loan, that’s what we’re talking about. And when it comes to finances, loans and debts, government officials in all governments in all ages have all known that if you can hand out money to your citizens, though they may not respect you for it, they seem to like you more. And if in a country where there are elections, they are more likely to vote for you. So corrupted governments, corrupted officials in government routinely love to design ways to hand out money and call it compassion or call it incentives or any number of justifications, and then remind the voters at election times of all the good things that they have done for them. Right? Doesn’t that sound familiar? Because it is here in America, the ability though to design handout or innumerable assistance or incentive programs, whatever tag they put on them, we’ve had an incredible advantage our officials have in that our government can literally engage in legalized theft.

Sam Rohrer:       How you say, well, by printing money you just print money. We can do that. Most countries can’t just print money. We can and we’ve had the US dollar in the dollar reserve. So we’ve been able to actually, well, we’ve been actually been able to steal money from other countries and that is coming home to roost as well, but that’s the deal. And print money, we have total national debt, we said in the other segment now is at 34.6, just about to go to 30.7, increasing about a trillion dollars every six months. Now it’s just out of sight. Well, the creation of a program that kind of tapped into all of this, in fact was the student loan program when it was instituted years ago. Alright, David, now let’s get into some history here. Would you share the history of the student loan program and Congress?

David New:         Yes, apparently the student loan program, the federal student loan program began in 1958. I’m reading from the syllabus of the Supreme Court case and what they wrote is to say, to ensure that Americans could keep up with increasing international competition, Congress authorized the first federal student loans in 1958, so there’s your golden year. The amount was up to $1,000 per student each year. So how do you justify something like that? How does the government justify giving out student loans or guaranteeing them? They did it under the National Defense Act of 1958. What they’re effectively saying is giving student loans is part of the national defense of the United States. And of course that’s a complete joke,

Sam Rohrer:       David. It is a complete joke. So just go beyond that a little bit. You’ve made a statement. It’s a complete joke. Alright, well how did they justify that it had anything to do with national defense? I know you cited it, but go beyond that. It obviously fooled a lot of people. I mean Congress by a majority vote thought that Yeah, yeah, this is a matter of national defense. So what was so deceptive at that point, maybe in 1958 that made ’em believe it and then why is it so now particularly looking back, obvious that it had nothing to do with national defense.

David New:         Look at what Mr. Biden is trying to do. The total student loan debt is $1.6 trillion and about 43 million Americans owe that. He already has forgiven a very small percent of that, about 9% he’s forgiven 144 billion, which represents about 4 million Americans. Now, the Congress gave the president power to forgive student loan debt under certain conditions, for example.

Sam Rohrer:       Alright, hold that, David, hold that because we’re going to go into the forgiveness aspect in the next segment. Let’s stay on here. The constitutionality and the legitimacy for the passage of this legislation back in 1958. Do you know of anything that was existing in 1958 perhaps that would have convinced the majority of Congress to actually begin a program of this type and link it to national defense?

David New:         There is no way you can get to guaranteeing a student loan to national defense. The federal government clearly has national defense authorization. The president is the commander in chief and he can with the Congress raise money and have an army and a Navy and an Air Force and a Marine Corps. And of course don’t forget the Coast Guard, but there’s no way you can link the two with the education with public education in the United States.

Sam Rohrer:       Well David, they would’ve said, and I think they did that well, you got to have educated people If they’re going to be in the military, army, Navy Air Force, we need smart people send them to college and therefore that was the linkage that they were saying there would help our national defense by improving the academic level of those who would be in the armed forces. Is there a direct correlation to education and ability to fight?

David New:         There is no direct correlation by the way, the interstate highway system now here they have half of an excuse the interstate highway system that the United States has. That was justified on the basis of national defense as well. Okay, now you can make a correlation between having good roads throughout the United States so that military assets can move quickly for one point to another, but whether it can justify a total interstate system of federal highways all over the country, that’s a bit even a stretch then.

Sam Rohrer:       Okay, let’s go to here. That’s part of it and let’s go to the constitutional part of it. Every person in Congress, a state office too, takes an oath to support and defend the constitution and make sure that their votes are in fact constitutional. So what about the constitutional aspect of beginning a program of this type? Is there a constitutional basis to do it?

David New:         Ladies and gentlemen, whenever you want to know if something is constitutional, as I have said before, always start at article one, section eight. That’s where you want to start your analysis and there are 17 items listed that authorize Congress to do. It says nothing about education, it says nothing about giving loans for education. It says nothing about guaranteeing loans for education. So this whole program violates article one, section eight, but it also violates another section. Look at article one, section seven and the very first sentence, it says, all bills for raising revenue shall originate in the House of Representatives. Now the house was given that power to raise money, to raise revenue because the people could vote them out very quickly after two years if they did something the people didn’t like. Now here what Mr. Biden is doing, he’s bypassing the House of Representatives. He effectively is raising taxes without Congress because when he forgives the debt, which is basically a transfer, when he transfer this loan to the whole population of the United States, he’s fundamentally raising taxes. That’s what he’s doing. So it violates article one, section eight, it violates article one, section seven, the first paragraph.

Sam Rohrer:       Alright David, and you could go much further on that and ladies and gentlemen, I was just thinking about in talking to David about this, that when you consider that student loan in the beginning of a brand new program that is only guaranteed to grow because you are subsidizing an activity, which is what we just talked about, and therefore you know it is going to grow because people are going to want to get either free money or low cost money. So they knew it was going to grow and stick it inside the National Defense Authorization Act. Well now in reality, I was in state office for about 20 years. You all know this, that who wants to be unpatriotic and vote against the military? Well stick it in the National Defense Authorization Act. And do you know what David and I were talking before we went on the air, I think for the last dozen years there has not been a budget in Congress that’s been appropriately passed -just continuing resolutions, but what has passed National Defense Authorization Acts, and if you look at what’s in those acts, everything under the sun, including starting new projects in the White House under pandemic awareness and telling the president that he’s got to come up with emergency plans to actual involvement even with the World Health Organization are all stuck in the Defense Authorization Act.

Sam Rohrer:       It is corrupt because you bury it in there and then nobody in the house to the Senate have to answer for their vote. That’s what’s done. So compassion or corruption, I think you know what direction it is. We’ll be back in just a moment.

Sam Rohrer:       Well, we’re midpoint at our program here today. Biden’s Student Loan Forgiveness: Compassion or corruption? and we’re dealing with that issue today because it’s in the news with the president repeatedly and very recently promising, well mostly younger people, but those with student debt of which was about 40 million, of which there’s 1.7 right now, trillion in student loan debt. There’s a part of our $34.6 trillion total US debt, big, big numbers just beyond imagination. So we’re walking through the consideration of this and we just talked about David New and I just talked about 1958 is when the student loan act was instituted, stuck inside a defense authorization act, having nothing to do with national defense and unconstitutional as David made very clearly.

Sam Rohrer:       Alright, well now we’re way down the road and many, many people have contributed and are a part of that 1.7 trillion. But with the US national debt, which I just stated what it was, 34.6 trillion and growing at staggering rates, the continuance of our American republic is, I’m going to say a very hard statement…is nearing an end. Based on what you say? Well, based on history of past civilizations who also embraced an attitude of well too big to fail or you can spend your way out of a hole and intentionally along the way jump the fences that were instituted for safety and in our case, ignoring constitutional restraints put in place by much wiser people years ago and opposed by law. You just figure out a way around it. Now America is faced with a student loan law that’s in place still and it has an enormous debt associated with it, as I’ve said, 1.7 trillion and there are consequences of that debt as there is with our total national debt that goes beyond manageability.

Sam Rohrer:       And now we have a president who sees the opportunity to exploit that whole problem by promising forgiveness, forgiveness for loans, clearly hoping for votes from a younger generation who they know, and the numbers say, don’t really like him or see any true hope in what he has to offer. So there is the circumstance. Okay, David, let’s move now into this. I already asked you the question, was the original student loan program of 1958 Constitutional, you said no, absolutely incited the reasons, but since that point the court has had some considerations before them. What have court rulings said in regard to student loan program and debt and debt forgiveness particularly?

David New:         Yes. First of all, I want to go back about the government subsidy and how that works and why student loan debt has grown so much. When the government subsidized the students’ loan, the effect it has on the college and the university is quite profound. They have no incentive to control cost- none. The colleges and the universities have exceeded the inflation rate for more than a decade. They always are higher and they’re raising their prices because they know that the student who borrows money to go to their school, the government is going to bail ’em out if it has to. That’s why they’ve always exceeded the inflation rate. No matter what year it was, the tuition went up more than inflation. Now here’s the area where the president can forgive debt legally.

Sam Rohrer:       David, let me interject this to prove your point. The perfect, perfect point ladies and gentlemen. 2020, how many years ago is that? Four years average tuition across the country, $10,667. What is it now today, four years later, 26,550. That’s over two times higher in the last four years. Okay, David proved a point and I’m just offering numbers that are official supporting what you just said. Please go ahead.

David New:         As Supreme Court in their decision said the president, under certain circumstances, Congress gave the president the power to forgive student loan debt. He’s already done 4 million students. These 4 million fell in one of these four categories. Either they worked as a public servant, they worked for the government. Somehow the president can forgive their student loan debt. Number two, they were permanently and totally disabled. If that happens, the president can forgive your student loan debt. Number three, if you filed bankruptcy, the president can forgive your student loan debt. Number four, if there was bad conduct by the school, the school promised you something, they represented something to the student that they would do for the student and it didn’t happen. That also can be a reason for the president to forgive the debt. Now here’s what the president was trying to do that the Supreme Court said no to the president was going to go beyond 4 million and I’m beyond 144 billion.

David New:         He wanted to go to $430 billion. That’s what the case was about. That’s one half of a trillion dollars. Now, had that been approved, that means about 20 million students who borrowed money from the federal government, their debt would’ve been wiped out completely. Another 23 million students would’ve had their student loan debt reduced from 29 K to about 13 K. Why did the Supreme Court rule against President Biden? Here’s the golden words, ladies and gentlemen. They are clear congressional authorization, clear congressional authorization. The Supreme Court looked at where the Congress gave the president power to forgive student loan debt and then looked at this 430 billion program that would forgive another 46 million students. And they said there is nothing from Congress. That’s a clear congressional authorization to do it. And that’s why the vote was six to three to kill.

Sam Rohrer:       Okay, and that was clear. But it was interesting, David, as an attorney, constitutional attorney, doesn’t it seem strange to you that even the court would say, well you can, but 430 is too much, but maybe if you would’ve made it 300 billion, maybe we would’ve approved it. Was there any indication in the ruling? Was it the dollar amount but allowing the principal to be done? You understand what I’m saying? There’s a problem here I think.

David New:         No, it was not that. It was not the dollar. Well, it was the dollar amount, but it was because Congress gave the president limited authorization to forgive student loan debt. And I gave the four reasons, okay, once you go beyond those four, president Biden can’t fit these other 40 million students and a half a trillion dollars. He can’t fit them into any one of these four groups. So that’s why the Supreme Court said, you just don’t have clear congressional authorization to do what you want to do.

Sam Rohrer:       Alright, that all sounds good. If things were working, David, in a setting where the law was being followed, the constitution was being followed, we wouldn’t have that program to begin with. Number one, the president, if he would’ve tried such a thing, wouldn’t have tried it because he knew he didn’t have the authority and the court having gotten involved said, no, you can’t. That should have done it. But he went ahead and he’s still plowing ahead promising to forgive loans. So what do you call that and what’s the end the game when the executive branch says, we’re going to go ahead and do it anyway?

David New:         No, what he’s saying right now, we’re looking for a way to do it. That’s the advertisement he’s giving to these young voters. He’s saying, we haven’t given up, we’re going to find another way to do it if we can do it. That’s what he’s saying right now.

Sam Rohrer:       Okay, that’s an important distinction, ladies and gentlemen. So it actually has not been done. However, the message that gets planted in the media that gets sent to the young voters is that this gentleman, president down there is working for you and people walk away with the sense that Santa Claus is in office and keep hanging on David. So in reality, it has not been done. He’s not actually done it yet, but there’s going to find ways to try to get around the court ruling. That’s what you’re saying, and somehow, somehow by executive action, whatever to bypass Congress. I mean that’s what he’s saying, isn’t it?

David New:         What he can do if he really wants to give a lot of student loan debt, forgiveness is he can change the bankruptcy rules to make it a lot easier. It used to be very easy to get discharged in a bankruptcy court from your student loan. Then about 10 or 15 years ago when George Bush was president, they really tightened it up. They put the squeeze totally. So it’s almost impossible. If President Biden wants to give students a chance to pay off their debt, give them a good economy, don’t treat Wall Street as the enemy, don’t treat the business community as the enemy. You give these students a good economy, they will be able to pay off their student loans.

Sam Rohrer:       There you go ladies and gentlemen. So there are two options. There are two options. Pay back what you owe federal government. Encourage those people to pay back or you go the other way, which is totally corrupt what we’re talking about and tell them we’re just going to forgive it and even walk away and forget it when so many have actually worked very hard and paid off their debt. And we’ll come back. We’re going to talk about some other considerations.

Sam Rohrer:       Well, as we go into our final segment today, student loans is overall theme. And I’m not going to go back and hit what we’ve already talked about, but it’s an issue. It is an issue when our President is campaigning about the country promising the younger generation, those who hold primarily most of student loan debts, telling them that he’s going to find a way to forgive their debt via Santa Claus, but at a time that’s right smack in the closing here on an election.

Sam Rohrer:       So, it’s very obvious what is taking place, and it really is very sad. But when legal and constitutional prohibitions are violated as we’ve gone through and demonstrated in regard to own program altogether, let alone just unilaterally trying to forgive it for personal reasons and gains, but when that happens, there are severe consequences when money can be printed, which we talked about. It’s the heart of these handout programs of which there are so many and why we have a debt national debt of over $34 trillion where we print money at will. The temptation to use money as a tool for bribery is placed on steroids. Now think about this. When great personal and national wealth, as we’ve seen in America, we know as believers it’s because God has blessed, he said in Deuteronomy, you do what I say as a nation, I will make you prosperous. And that was once the case in our country, when our foundation of our laws and those in office were not to exploit their own benefit.

Sam Rohrer:       You know what I mean? So that was the result. But when a nation becomes blessed, the temptation as God warned Israel in Deuteronomy chapter eight is to assume, well, that they did it all. They take credit for everything that God did and they begin to think that, well, we’re just too big to fail. And though history and biblical illustration and moral warnings are there that warn against this concept of pride and how it leads to a fall, the idea is that, well, it doesn’t apply to us. That may be somebody else, but not to us. That’s the thinking all through history. But reality of it is it does apply. So as we conclude today’s program, it makes sense to look at some of the consequences and the ignored warnings or one could say the moral hazards that have accompanied the student loan program and applies to almost all of the other ones equally.

Sam Rohrer:       But this one we’re talking about and now the shameless actions by the president to simply forgive those loans. Alright, David, I kind of set up that backdrop a little bit because human nature, the concept of handing out money, government officials seeking the votes of people because they brought them all these good things, which was not their own personal money, it was the taxpayer’s money and they just got ahold of it as the president is doing. Alright, that’s a big deal. So in addition to those constitutional reasons you’ve cited and all of that, can you share some of these other, what you call hazards, moral hazards that result from this kind of action?

David New:         Yes, presidents and executives, elected officials, governors have always used their ability to enrich or favor some people with some promises and government programs. But in the vast majority of the cases, these issues, these bribes, shall we say were done behind closed doors. Presidents have always given away goodies to get political support for their reelection. That’s nothing new. What’s different is this president is so open and public about it that is different and I think this is where Covid comes in. When we had Covid, the United States federal government and as well as many state governments like California just started giving out money to people. They just sent you a check. If you filed your income taxes, you got some money and it didn’t matter. You don’t have to earn it, you don’t have to do anything with it. They’re just going to mail it to you.

David New:         Now, that’s what Covid did, and I think that’s why this has now happened with Biden. He saw that this was done. This money that was given during Covid was so bad in terms of morality. People started not wanting to work for a period of time. They wanted to stay home. Now here’s what we’ve got. We’ve got a student who wants to borrow money and he doesn’t have to worry too much whether he has to pay it back. Now he knows that there’s a federal government behind him. Now here’s the thing. This creates what’s known as a moral hazard. What is a moral hazard? A moral hazard is this, in economics, a moral hazard is a situation where an economic actor has an incentive to increase its exposure to risk because it does not have to bear the full cost of that risk. Let me read it again.

David New:         In economics, a moral hazard is a situation where an economic actor, the student in this case, has an incentive to increase its exposure to risk debt because it does not have to bear the full cost of that risk, the debt. Now this is what he’s doing and it’s extremely bad. It sends a very immoral message to young students, to everybody. There are other things that are bad about this. It’s unjust. Fundamentally, he’s favoring one group of people, the educated class over the uneducated class. He’s asking people who only graduated from high school or never graduated from high school to pay these college kids and their deaths. And that is about as unfair as you can get. He’s asking these student loans to be forgiven. When other college students such as myself have paid off my student loans, why would I want to do that when the president should have come along and he should have forgave my debt a long time ago? The next thing it does, it creates a mindset in the public. When do I get mine? What kind of a handout is the government going to give me? I think I should get something. And so there’s all kinds of reasons why this is extremely immoral and very bad, and it’s something that I think Covid has delivered to us when they just started giving out money to everybody.

Sam Rohrer:       David, that is a great, great point and agree with you totally. That greased the skids more or less in people’s mentality. Well, I deserve it. Government, you put us in this problem, you deserve to pay me and people we all and it ended up showing up in our bank accounts, didn’t it? Automatic, ladies and gentlemen, two principles from Scripture summarizing what David just said. Come draw off the page of Scripture is this, number one, living by debt is living by a lie, right? Because it denies the reality of accountability, which David just talked about, and the fact that choices have consequences and it’s another one. When money becomes the goal in life, mammon becomes the goal in life. What’s it produce? It produces a sense of well power. It produces bribery and corruption, and it ends up with injustice for all. How do I know that? Go to the book of Ezekiel chapter 22 and read verses 25 through 29. You will see exactly what we’re talking about. When the levels of government get involved and the people come to expect a handout from government, it’s called bribery. It’s what we have and God says he hates it. Alright, that takes us back to the scripture. David New. Thank you so much for being with me today. Current issue and ladies and gentlemen, stand in the gap for truth where you are.