It pains Eakinomics to report that on Friday the Biden Administration forgave $39 billion in students loans, affecting 800,000 borrowers. It did so by changing the way monthly payments count under the various income-driven repayment programs. Forgiveness in those programs occurs after either 240 or 300 monthly payments; the changes count partial, late, or even non-payments (during the pandemic) toward the total, leading to the forgiveness. (A good description is here.)

The administration evidently can’t help itself. It simply must forgive student loans. This latest effort comes just two weeks after the Supreme Court tossed the president’s signature loan forgiveness. The administration can do this – the authority was clearly given by Congress – but it still hasn’t provided a compelling rationale for why the taxpayer should be asked to pay for it. Forgiveness simply does not make good sense.

It does not improve college education one bit. It will not produce another year of college, an additional skill in the workforce, or any other education outcome. All the president says is that college should be a path to the middle class, not an anchor on progress. It is classic Bidenomics, a catchy phrase that is empty upon inspection. Every careful study of loan forgiveness finds that it favors the affluent, and so it is dramatically unfair.

The greatest disappointment is the moral vacuum in the policy. Student loans are a contract and should be repaid if at all possible. The indiscriminate approach to forgiveness displayed by the Biden Administration sends the message that one can simply ignore the contract and foist the burden on someone else.

In the absence of any serious policy foundation, one can only be tempted to conclude this is transparent pandering to buy votes. Or, maybe the administration simply just must forgive loans – forgiveness OCD.