Biden’s Student Debt Cancellation Leaves Taxpayers With $550 Billion Tab

(Republican Insider) – Milton Friedman, one of the most legendary economists from the United States, once famously stated there’s no such thing as a free lunch. This, of course, was a rebuttal to the idea that socialist policies like an expanded welfare state and “free” healthcare were not, contrary to what people were told by their proponents, actually without cost. The money needed to fund such programs was to be taken in large quantities from hard working American people via taxation. And no, it wouldn’t be the rich footing the bill, it would be the middle class, which due to high taxes and cost of living, would soon be driven to poverty.

This principle applies when discussing President Joe Biden’s student loan forgiveness program. You see, there’s lots of people who are under the mistaken notion that you only have to say a few magic words and press a button or two on a keyboard in order to erase debt. That is not how it works. No, this student loan forgiveness program isn’t just waving a magic wand and making the money people owe suddenly go “poof!” into thin air.

It comes with a price tag that someone other than the borrower will have to pay. And let me tell you, it’s VERY expensive.

“According to the New York Post, a new study by the University of Pennsylvania estimates that a new round of student loan cancellation programs raises the amount that taxpayers are stuck holding to $559 billion total, including $84 billion under new provisions announced last week,” The Western Journal disclosed.

Yes, that’s right, guys. We, the American taxpayers, will be providing coerced aid in the amount of $559 billion for individuals who acted careless and chose degree programs that were essentially useless when the time came to get a job. Say, who helped you pay off your student loans? What’s that? You worked two jobs and subsisted on ramen noodles to get the job done?

And now, those who paid their loans are paying someone else’s loans. They are essentially being forced back to square one, only this time, they are picking up the tab for someone else’s mistake. Pretty much the definition of “not fair.”

“The kicker? The newest provisions under the Saving on a Valuable Education, or SAVE, plan will benefit those in higher tax brackets the most. The income-driven plan was introduced last summer, but new loan cancellations for 277,000 borrowers were announced last week,” the report continued.

“Today’s announcement shows — once again — that the Biden-Harris Administration is not letting up its efforts to give hardworking Americans some breathing room,” Education Secretary Miguel Cardona revealed in a statement, said the Post.

“As long as there are people with overwhelming student loan debt competing with basic needs such as food and healthcare, we will remain relentless in our pursuit to bring relief to millions across the country,” Cardona asserted.

During his typical rounds with the media, Cardona explained how the plan would help the most vulnerable student loan recipients.

“However, the University of Pennsylvania’s Penn Wharton Budget Model found that the new round of cancellations wasn’t exactly going to help those who were struggling to put food on the table — unless their diet consisted of three square meals of foie gras and Wagyu steak,” The WJ reported.

“President Biden recently announced five main provisions to provide student loan debt relief. Some of provisions are already mostly covered by President Biden’s SAVE plan introduced in 2023. Some provisions, however, are more incremental to the SAVE plan, including one provision — the forgiveness of longer-term debt — that expands eligibility to higher-income households,” a Thursday media release of the study’s key takeaways divulged.

“We estimate that the New Plans will cost $84 billion in addition to the $475 billion that we estimated for President Biden’s SAVE plan, for a total cost of about $559 billion across both plans,” the release added.

“While the New Plans, like the SAVE plan, contain provisions to relieve debt based on individual or household income, the New Plans will also relieve some longer-term student debt for about 750,000 households making over $312,000 in average household income,” it noted. “The main reason for this high average household income is that the SAVE plan already provides long-term debt relief to households with lower incomes.”

Out of five major components from the administration’s new plans, there are two that really drive the relief up the income ladder.

The first one is the threshold for waiving any accrued and capitalized interest on the loans themselves.

“Up to $20,000 in accrued and capitalized interest will be waived for borrowers with current balances above the initial balance upon entering repayment, regardless of borrower’s income,” the release from Wharton declared.

“Single borrowers making less than $120,000 or couples making less than $240,000 a year will qualify for a total waiver of all current balances above the initial balance if they are enrolled in any IDR plan. Automatic relief will be applied, and so no application is needed,” it read.

The other is the elimination of undergraduate student debt for individuals who have been paying it for over two decades or graduate debt for 25 years.

“If student loan repayments started on or before July 1, 2005, all debt will be eliminated for borrowers with undergraduate loans only. (For borrowers with any graduate debt, this date is pushed back to July 1, 2000). No enrollment in IDR plans will be needed to receive the relief, but currently it’s unclear if any other application will be required from the borrowers,” the news release went on to explain.

“The total cost of all the five measures is a touch over $84 billion, added to the estimated $475 billion Biden’s unilateral student loan relief has already put taxpayers on the hook for. However, in this case, Biden is providing relief to households who are less than $100,000 away from that magical $400,000 number that he says makes you one of the wealthy that he plans to tax to pay for his spending sprees — you know, those who need to start paying their ‘fair share.'”

Since this is an election year, it seems likely the reason why Biden has chosen to do this is because he wants to buy votes and defeat former President Donald Trump in the general election.

Rep. Jodey Arrington, a Republican from Texas who serves as the chairman of the House Budget Committee, remarked that the measures were not just unconstitutional, but a “quest to buy votes.” Guess that means we’re on the same page, Arrington and I.

“In reality, his plan will shift the responsibility of paying for loans owed by high-income earners who freely incurred them onto the backs of all taxpayers, many of whom do not even have a college degree,” Arrington revealed in a statement. “[Biden’s] administration is dead set on circumventing the Supreme Court, defying Congress, and saddling our country with more debt.”

So this isn’t helping individuals who are strapped for cash and struggling to make ends meet. These are fairly wealthy people who will be benefiting. Again, it’s about the votes, nothing more.

Copyright 2024.

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