Obama's Latest Charade: Having induced $1 trillion in debt, Democrats now want to write it off

You can tell an election is coming, because President Obama is promising more student-loan relief to young people who are growing less enthralled with his economic record. The latest exercise unveiled Monday is also supposed to make these young people forget the loan burden that earlier free lunches supposedly provided. The taxpayer losses will come on some other President's watch.

Specifically, Mr. Obama announced an expansion of the burgeoning disaster known as his Pay As You Earn program. This gift from taxpayers caps monthly student-loan payments at 10% of a borrower's discretionary income, regardless of how much the borrower owes. Even better, the borrowers have their debts entirely forgiven after 20 years—or merely 10 years if they work in government or nonprofits. Those who work outside the profit-making economy don't even have to report the forgiven loans as income.

This deal has been so attractive that enrollment in this and other income-based repayment plans surged nearly 40% in the six-month period ending in March. The surge was so great that even President Obama felt obliged to propose in his 2015 budget released that month that it was time to reform Pay As You Earn "to ensure that the program is well-targeted and provides a safeguard against rising tuition at high-cost institutions."

Three months later, with the possibility of a Republican Senate on the horizon, "well-targeted" seems to mean no targets at all. The program used to be closed to people who borrowed before October 2007, or who have not borrowed since October 2011, but now Mr. Obama is by regulatory fiat opening the giveaway to older borrowers too.

And whereas the White House budget said expanding Pay As You Earn would cost more than $7 billion in the first year, White House domestic policy director Cecelia Munoz said Monday on MSNBC that expanding the program will now save money. So we are supposed to believe that more subsidies plus more loan forgiveness equals less cost to taxpayers.

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