Neal McCluskey

A new Government Accountability Office report on the Biden administration’s student debt cancellation bonanza, which was struck down by the Supreme Court in June, says the administration was doing too little to protect taxpayers:

Education developed two processes to assess borrower incomes and account for fraud risks, but did not implement key procedures to further identify and prevent potential fraud. For example, the department approved millions of applicants before fully implementing processes to review and evaluate fraud risk, such as collecting income information from the other borrowers it had selected for verification or assessing the borrowers it had approved. In addition, the department automatically approved some borrowers based on self‐​reported data, without conducting any additional assessment of borrower risk.

This sounds like an administration in a hurry, which is certainly how the cancellation felt. After a year and a half of reaching no conclusion about mass cancellation, on August 24, 2022, Biden declared that he was good to go. By mid‐​October, as various groups scrambled to mount a legal defense against the unconstitutional $430 billion action, the Department of Education started taking—and approving—applications.

In response to the GAO, the Department says it did enough to block fraud, and would have done more had a court—perhaps unexpectedly—not issued an injunction against the cancellation effort. The administration says it knew who the vast majority of applicants were, so the fraud threat was minimal. To this, GAO responded that even if a small share of applications were fraudulent, that could still seriously add up in a $430 billion action. It is also a little hard to feel assured that the Education Department really knew all about its borrowers, since a 2022 GAO report found that the department had major record‐​keeping problems. Indeed, that incompetence is part of the justification for $39 billion in cancellation the Biden administration recently declared.

This is all part of a larger pattern of the Biden administration canceling student debt left and right in ways largely inscrutable to the public and, at least in some cases, almost certainly unconstitutional. Indeed, the same day the Supreme Court declared Biden’s jubilee unconstitutional, the president announced his administration had “finalized” a new, very generous repayment program. No act of Congress—the people’s representatives. Just Biden begetting a repayment plan expected to cost taxpayers $475 billion over ten years. Meanwhile, other repayment‐​easing endeavors are working through heavily biased regulatory procedures.

The new GAO report highlights the dangers that were in Biden’s gold rush for student borrowers. But more broadly, it helps illuminate the reality of policymaking unmoored from basic constitutional processes: the diffuse people who will pay the costs—taxpayers—are afterthoughts.