President Biden announced Wednesday that he will cancel $10,000 of federal student loan debt for certain borrowers making less than $125,000 per year, and up to $20,000 for Pell Grant recipients, while extending the pause on federal student loan payments through the end of the year. Working with a professional who have taken courses like Online continuing education can be handy when it comes to loans.
“In keeping with my campaign promise, my Administration is announcing a plan to give working and middle class families breathing room as they prepare to resume federal student loan payments in January 2023,” Biden tweeted.
Biden is expected to give remarks on the plan Wednesday afternoon.
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In keeping with my campaign promise, my Administration is announcing a plan to give working and middle class families breathing room as they prepare to resume federal student loan payments in January 2023.
I'll have more details this afternoon. pic.twitter.com/kuZNqoMe4I
— President Biden (@POTUS) August 24, 2022
Original commentary is below:
Biden set to announce decision on student loans; potential results are troubling
With the economy teetering on the brink of a recession, President Joe Biden is expected to announce his decision about student loans as early as this week.
He, at a minimum, must decide whether to extend the pause on federal student loan repayments for some 40 million borrowers by Aug. 31. Initially paused under President Donald Trump in 2020 during the early weeks of the COVID-19 pandemic, it has been extended six times.
If Biden allows the pause to expire, student loan repayments would be expected to begin within weeks.
If he extends the pause — conveniently until after the midterm election where borrowers might want to thank him with their votes for his fellow Democrats — repayments might not be expected until after the first of the year.
But Biden is also pondering forgiving some $10,000 of student loans for all federal student loan borrowers, and it only would make sense for him to make that announcement in conjunction with whatever decision he’ll make on the pause.
So the issue is certainly on his front burner.
As an example Tennesseans — 862,000 of them — owe $31.4 billion in student loans, with the average borrower on the tab for $36,418, according to a 2022 survey by educationdata.org. The total amount ties for the 14th highest amount among the 50 states and Washington, D.C., with the per-borrower amount 17th in the U.S.
According to the survey, about 12.5% of the state’s residents have some amount of student debt. Two percent owe more than $200,000, but 15.8% owe less than $5,000. A big chunk of the borrowers, 21.4%, owe between $20,000 and $40,000, those averaging about $28,626.
We happened to talk to two people who had student debt in recent days. In their mid- to late-30s, they both work, live in an apartment and have no children. Their choice of living in an apartment and having no children, they intimated, was due to their student loans.
Loan forgiveness, they said, would be a big help.
We see that. Forgiven $10,000 apiece — if they owe that much and if their loans are federal — they might have a better opportunity to buy a home or afford a child. Multiply that by many millions, and you have have an economy that would feel quite stimulated, thank you.
Of course, the total amount that would be forgiven is taxpayer money. It is not paid for by taxing the rich, the corporations or the oil companies that Democrats would love to pay for all of their spending schemes. It’s money that was paid by the federal government out of its treasury to colleges but money that with the forgiveness would never be repaid.
And talk about picking winners. Millions who took out student loans and paid back every dime wouldn’t be covered. Parents who paid for their children’s college out of their hard-earned savings wouldn’t see a penny. Those of us who paid for college by working also wouldn’t see a thing.
But it certainly would have an effect, a detrimental effect, on the economy, according to financial experts. And it would wipe out some of the benefits of the just-signed Inflation Reduction Act. That is, it would if you believe the measure — based on budget gimmickry and fuzzy numbers — will have any affect on the debt or inflation.
An analysis from the Committee for a Responsible Federal Budget found that just extending the pause would cost $20 billion, negating the deficit reduction the Biden administration expects from the first six years of the act.
On the other hand, if the president forgave $10,000 per borrower for households that earned less than $300,000, the cost would be $230 billion, enough to wipe out nearly 10 years of the $305 billion in deficit reduction the administration says its plan would bring about through 2031.
As to inflation, despite Biden’s claims of the Inflation Reduction Act actually reducing inflation, an analysis from the Penn Wharton Budget Model found the act’s effect on inflation would be “statistically indistinguishable from zero.”
An additional one-year pause in the repayment of federal student loans, according to the Committee for the Responsible Federal Budget, would increase inflation 0.2%. Canceling the $10,000 per borrower, the analysis said, would add another .15% up front and more over time since the money that would have returned the government will instead be spent on goods and services.
Recall, if you will, the pause in student loans was made as a pandemic relief effort. Now that the borrowers have become used to not paying back the money, the administration is spinning talk of an extended pause or loan forgiveness as not wanting to further burden the beleaguered former students.
Where have we heard such spinning before? That American Rescue Plan, that’s where.
In 2021, the American Rescue Plan was passed by the Democratic Congress ostensibly to help cities and counties deal with the pandemic. But that money is now being spent on a panoply of needs that have nothing whatsoever to do with the pandemic.
So, with just a week before the Aug 31 deadline, former student borrowers are crossing their fingers to hear good news. Meanwhile, most taxpayers are crossing their fingers in hopes of a different outcome.
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That money has already been spent though it belongs in the treasury, if it’s not paid back by the borrowers then that money is the reponsibility of those who have repaid their loans by sacrificing and those who never borrowed at all and never engaged in higher learning but became productive citizens on their own, either way it’s a penalty on those who didn’t take out a loan.
More and more, it seems like being a PRODUCTIVE Member of society, paying your debts, BUYING goods, following the laws, is being PUNISHED BY those in charge. Where as the unproductive members, thieves, welfare leeches etc, ARE THE ONES BEING Rewarded…
It’s a bigger slap in the face of those of us who DID pay back our students. Looks like we were a bunch of suckers.
Also, what of those who went to ‘school’ on scholarships, its a smack in their faces, for STRIVING TO GET The scholarships!
OR all those parent(s) who struggled to make ends meet, put off on holidays and family vacations, put off buying new cars/trucks, or those big screen tvs etc, just to scrimp and save to PUT Their kid(s) into college..
This is essentially telling all these kids, WHO CARES WHAT CONTRACT YOU SIGN. Whine loud enough and UNCA govt, will get you out of it.
The treachery of the treasonous, socialist Democrat Party know no bounds.
This is just another gimmick and con in the effort to buy votes in the November elections at the cost of the taxpayers.
The deception:
We (who is “we”) happened to talk to two people (selected people) who had student debt in recent days. In their mid- to late-30s, they both work, live in an apartment and have no children. Their choice of living in an apartment and having no children, they intimated, was due to their student loans. (But their cars cost more than what they owe on their student loan)
According to the survey, about 12.5% of the state’s residents have some amount of student debt. Two percent owe more than $200,000, but 15.8% owe less than $5,000. A big chunk of the borrowers, 21.4%, owe between $20,000 and $40,000, those averaging about $28,626.
Throwing more federal dollars into the economy of educational tuitions just inflates the cost of university tuitions more expensive to those able to pay their own freight, and harder for those struggling to honestly earn their own way. Joe in essence just allowed the Universities to raise their tuitions by $10,000, with the Taxpayer about to be setup for their next Democrat scams ready to defraud THE PEOPLE. Funny is it not that Joe will forgive $10K for families making under $300K, while Congressman like AOC make $174K, apparently designed to have THE PEOPLE finance the education of more Liberal Social experimenters in just how to fleece THE PEOPLE into financing the Democrat Party of criminal social theft, now on the level of Hundreds of Billions. Their so-called Inflation reduction bill is suppose to save the taxpayers $100 billion, while Joe’s student loan program giveaway costs them $300 billion in more debt and will inflate the cost of university tuition. Another impeachable offense ready for a Republican Congress to use after the elections.
Also, what of FOREIGN STUDENTS who got debt? WILL WE Be on the hook to pay THEIR DEBT TOO?
What of illegal invaders>
Since the communist Dems are always claiming that we must slow down or stop population growth which their full term abortions worked well for limiting population. The article states that couples claim that if they get the tax payers and the productive portion of society to pay their debt then they can increase the US population by having kids in which will further be a burden on the tax payers no doubt. Anyone who signs for a loan is expected to pay it back, it is not free money nor is it other peoples responsibility to pay for loans someone else agreed too. We all had to pay our education debts and struggle through and we still managed to have our families. The ones screaming they need or want debt forgiveness are the ones that sit around campuses for 6-8 years because they keep changing their majors and each and every field choice is things like “liberal arts” or some useless degree where they spend 60-80k to get a degree in a field that pays 30k a year. When if they went to a trade school or learn a skill they could be making 80 -100k or more with no school debt. But because these slackers make bad decission in life, they want everyone else to pay for their bad decision.
oR they got law/business degrees, as i heard on fox, 60% or more, of those WITH pell grants, are top earners…
The student loan forgiveness is just an illegal attempt to buy Democrat votes with WE THE PEOPLE taxpayers financing the Democrat elections. It is illegal redistribution of taxpayer money from one party of honest endeavors to the other party of criminal intentions. Presidential executive orders are designed to be used only in cases of emergency, not to redistribute all the taxpayer’s money to enhance the fall election chances of the Democrat party who in this case is attempting to purchase votes in a definite age discrimination attempt to reward the lazy and dishonest social thieves at the expense of the law-abiding debt paying honest American Taxpayers who have alreadyhonestly paid off their loans. NOWHERE in the Constitution is the executive branch given the power via executive order to redistribute TRILLIONS of American taxpayer dollars right before an election, a power that lies squarely with the Legislature. Even suggesting this to be done to defraud honest Americans who paid off their loans in full is not just discriminatory in the favor of social theft, but a most grievous threat to the concept of American Democracy way more threatening than anything that happened January 6th, and just another reason to validate the grievances of those who marched on the Capitol, and a good indication that indeed this same party of criminal wealth redistribution was guilty as sin for the theft of the 2020 election in the Democrat party redistribution of dishonest votes.
You are correct! What old senile Joe is doing is buying votes from those that have their debt paid. Hopefully the taxpayers that are being stuck with those bills will take it out on the democrats come November and vote them out.
AND Didnt pelosi herself, LAST YEAR SAY “The president doesn’t have the legal authority to DO THIS< it has to be an act of congress"???
Disasterous idea – once again hard working tax payers will take the hit. This president will do anything for a vote. My daughter and her husband worked their tails off to pay off their college loans. Biden hasn’t had to worry about money a day in his low, lazy life and he thinks nothing of making it more difficult for Americans to get by – let alone get ahead. I hope his voters have serious buyer’s remorse helping us get the red wave we so badly need.
More and more, it seems being a tax payer, means BEING A TAX VICTIM, to govt extortion.
This whole mess is an affront to honest and hard working people who either have chosen to avoid student debt or have already paid off their school loans. In addition, how can this happen solely based upon an executive order? I’m also appalled at this being the way in which my taxes are being wasted while seniors go hungry and are denied ridiculously expensive medications due to the stress of keeping a roof over their head and food in their stomachs.
How about this. Treat the forgiven amount as ordinary income This will subject it to about 33% tax They got the education. They ran up the bill. Let them pay for it. Contrary to their belief, they are not entitled to the American taxpayer paying their bills. This will only cause more inflation and more hardship on working people. This is one of the worst vote getting scams this administration has come up with. But then, what’s new?
A gift to the STUPID. Guess who pays for it.
AND what’s the bet, most of them getting this debt are DEM VOTERS.
How would you like to be a law student studying CONTRACT LAW and find out that the entire concept is now meaningless ?
WITH how the left’s been treating the law itself, Contract or otherwise, ITS ALL MEANINGLESS now days.
the country is financially , morally , and common sense broke.
we lose this midterm to these demons from hell the country will be un fixable.
AND note, all this comes JUST IN TIME FOR the mid terms, hoping all those college dunces, will vote dem, to KEEP the dems in office…