President Joe Biden has announced a plan to “cancel” up to $20,000 of student loan debt held by qualifying borrowers.
The proposal would “provide up to $20,000 in debt cancellation to Pell Grant recipients with loans held by the Department of Education, and up to $10,000 in debt cancellation to non-Pell Grant recipients.”
To qualify, borrowers must earn less than $125,000 a year or $250,000 if married.
Additionally, the pause on student loan repayment will be “extended one final time” through the end of the year.
In a joint statement, Senators Chuck Schumer (D-NY) and Elizabeth Warren (D-MA) celebrated the move, stating, “The positive impacts of this move will be felt by families across the country, particularly in minority communities, and is the single most effective action that the President can take on his own to  help working families and the economy.”
The proposal, however, has proved contentious.
Previously, several high-profile members of the Democratic Party expressed the belief that the president did not have the authority to cancel student loans unilaterally and that to do so would be economically unwise.
Larry Summers, the treasury secretary under former President Bill Clinton and director of the National Economic Council under former President Barak Obama, recently stated, “I hope the [Biden] administration does not contribute to inflation macro-economically by offering unreasonably generous student loan relief.”
“Every dollar spent on student loan relief is a dollar that could have gone to support those who don’t get the opportunity to go to college,” Summers concluded, going on to note, “Student loan debt relief is spending that raises demand and increases inflation.”
Similarly, Speaker of the House Nancy Pelosi remarked as recently as July 2021, “People think that the President of the United States has the power for debt forgiveness … He does not. He can postpone, he can delay, but he does not have that power.”
However, following Biden’s announcement, Pelosi indicated a shift in perspective. She stated, “By delivering historic targeted student debt relief to millions of borrowers, more working families will be able to meet their kitchen table needs as they recover from the pandemic.”
Still, Republican opposition to the proposal has been virtually universal in implying that debt cancellation would unfairly impact those who either never took out loans or already paid them off.
Some have implied that the announcement’s timing so close to the midterm elections potentially makes it look like an attempt to boost Biden’s poll numbers.
For example, Senator Tom Cotton (R-AR) submitted that “Americans who paid off student loans or never borrowed for school just took on $300 billion in new debt, thanks to Biden’s shameless bribe.”
The American public also seems wary of the idea. A poll conducted for CNBC suggested that nearly 60% of Americans “are concerned that student loan forgiveness will make inflation worse.” Among Democrat respondents, 41% expressed concern.
Additionally, an analysis from the University of Pennsylvania’s Penn Wharton Budget Model identified that Biden’s plan would overwhelmingly benefit people already well above the poverty line, costing taxpayers roughly $300 billion.
The budget model indicated that up to nearly 75% of the money would go to “households in the top 60 percent of the income distribution” in America.
The U.S. Department of Education has taken steps to implement the plan, noting, “The Department will be announcing further details on how borrowers can claim this relief in the weeks ahead.”
I think this is a very good idea and move on Biden’s part. So many other ways to slash taxpayer dollars – rein in the BLM – stop incentivizing horse adoption with the $1,000 payback that mostly go to kill buyers, stop baseless animal experimentation…
The DEBT will be forced on the rest of us who pay our bills and paid for own college (without student loans). The experts said on the radio yesterday this will cost ALL AMERICAN TAXPAYERS about $2,000.00 a piece.. so this a very horrible and another STUPID BIDEN move…BUYING VOTES IS ALL THIS IS AND NOT FAIR TO ANYONE.
There are no “radio experts”. Just opinions
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I think it’s a very good way for the Democrats to reign in the African American vote for November. On the backs of the working (uneducated) poor…. white AND black and all other ethnicities.
“More than 57 percent of African American undergraduate students received a federal Pell grant in the 2015-16 academic year. For White students, 31.3 percent of all undergraduates received a federal Pell grant. African Americans were 22.7 percent of all Pell grant recipients. More than two-thirds of all African American Pell grant recipients also took out student loans with an average debt of $7,200.”
https://www.jbhe.com/2019/10/new-report-offers-data-on-race-ethnicity-of-pell-grant-recipients/
What are you even talking about??
So, I was a idiot for working my way thru college because I was taught to keep my debt to a minimum! Now I have to pay through taxes for lazy people who do NOT have the modal fortitude to pay back what the borrowed? I guess since I am retired I can load up my credit cards by going on vacations, and other services that can not be repossessed and not pay them off. At my age and finance status, it will not matter if my credit score BAD! Maybe I should tell everyone who is in a similar position like me to do this! Maybe this will make CC companies & banks raise the interest rates even more to make the next generation pay thru the nose! What’s good for the goose is good for the gander! Uh-Oh did I misgender goose and gander? Is there another gender for the goose species?
Nick, college is a lot more expensive than when you probably went to school. Now days working a full time job is not enough to pay for college, even a “less expensive” state college. 1) why do you assume that today’s students are somehow lazy? 2)Why would you (as a parent?) or anyone want to saddle todays youth with oppressive loans that keep them from contributing to society by buying a house and starting families and just living life debt free?
These so called lazy college students are our future doctors , scientist, teachers, accountants, engineers, etc. No one should be saddled with debt just to be educated. Also, this whole debt for college is a recent phenomenon. It is about 40 years old. College use to be, if not free, you could work a part time job and still have some extra spending change. That is no longer the case.
A college education is an investment in the future of the whole country not just the person going to school. College (Public/State) should be free.
He does not have the power. Even Nancy PIG-losi said so. this will go to the courts. All of us will be forced by higher taxes to pay this back. Approx $2K a year per the experts. This debt does NOT disappear
Horrible idea!! What will you forgive next, mortgage payments!! Stop relying on the gov’t to solve your problems. Gov’t is the worst run company that has ever existed.
So we bailed out the midwest farmers,the airlines, the banks,the oil companies, the insurance companies, and the states of Florida and Texas with disaster relief. Plus Israel and now we are bailing out NATO and Ukraine and we can’t help poor students who got in over their heads.
Give me a break !
You mean….””poor students”” that make $110,000? Those “”poor students””???
Banks got billions in bail outs why not the average joe for a change?
Clever wording by Biden as you cannot “cancel” debt. It is being shifted to others to pay and at $300Billion per year in additional taxes.
This is a dangerous path of paying for votes.
If your college degree does not allow you to pay the debt to acquire it, I suggest retaking ECON101, the section on ROI.
Exactly! I live within my means and honor my debt. The people we’re bailing out, by paying taxes to cover their debt, have the potential to make twice as me. There’s no cancelation of student loan debt. It is transferred to us. I wonder if the receiver of this 10k, 20k will have to pay taxes on the income received.
I’ll believe it when I see it.
Some people are trying to pay but can’t due to the interest rate that has been added, you owe more interest than your loan.
Millions of other college graduates have paid their loans. These “degreed” people are poised to get the highest paying jobs, they should pay their loans themselves. Hold the universities accountable for raising rates each time the government makes it easy on students. Personal responsibility should be the normal course of ones life.
While canceling the interest incurred would help everyone, the banks would push back. They, having lobbyist would prevent that.
Our country is being very short sited and a two party system with ‘politicians’ only interested in getting re-elected, and willing to pass legislation for popularity versus being prudent is only increasing future volatility. The belief that somehow we can tax our way to prosperity is ludicrous, or that we can give benefits to any group that are paid for by another – is wrong.
Tax payers on the hook for University scams? Universities selling wokism as a degree to students racking up 10s of thousand$ in debt! My son just finished his second masters and he paid his debt as he went. Why are tax payers responsible for the actions of scammed university students. They ate the steak…they need to pay for it. Why punish good behavior of people like my son, who does not make $50K, and reward idiots, who made bad choices? This is stupid!
Forgiven PPP loans
Marjorie Taylor Greene: $183,504
Boebert: $233,305
Catholic Church: $3.5 billion
Joel Osteen: $4.4 million
Tom Brady: $960,855
GOP should slink away in shame for attacking Biden for forgiving $10,000 of student debt
But they won’t cuz they have no shame
https://pbs.twimg.com/media/FbAih-NXoAAkyAU?format=jpg&name=medium
The Democrat Party is engaging in shameless vote buying while further alienating the American working class and minorities.
Newsweek – “Democrats Fret Over Low Black and Latino Voter Turnout in Florida Primaries
Adrian Carrasquillo – Yesterday 3:18 PM”
Good luck with all that.
This is another bad idea
I can agree. Compounding interest can have you repaying your loan 2 to 3 times over. Although there are some they may not repay their loan or even get a loan, I still think compounding interest is usury and a sin. I’m lost how our taxes may pay for it. Isn’t it a for profit business?
What do think “being above the law” means to biden,warren, schumer and a few more – that they can just put out an EO and that is that with no one having anything to say against it. Democrats just fall in line and follow whatever party sats; Republican are too wimpy to say anything against it and are afraid to speak up knowing if you do, you become subject to a raid, ask Trump.