Biden Announces Forgiveness – But There’s One BIG Catch
(AmericanProsperity.com) – After months of deliberation among the nation’s top politicians, Democrats have finally gotten their wish — at least part of it, anyway. President Joe Biden recently announced a student debt forgiveness plan. The legislation could change millions of Americans’ lives.
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
The Plan
While the decision may not be exactly what progressives were hoping for, Biden plans to relieve anyone making less than $125,000 annually of $10,000 in student loan debt. Anyone living in a household making less than $250,000 will qualify for the program as well. The president is also erasing up to $20,000 for any person who received a Pell grant for low income, wiping away all outstanding interest, and extending the loan repayment suspension until the end of 2022. Officials are uncertain of when the plan will take effect, but the Department of Education claims it will have an application process set by the end of the year.
Cost vs Benefits
The White House didn’t offer any details as to how much the student debt forgiveness would cost, but estimates indicate taxpayers could be paying in excess of $300 billion. A non-partisan group claims the price tag could possibly cost $500 billion over the next decade, according to ABC News.
During Biden’s remarks, he stated around 43 million Americans, or 95% of borrowers, would benefit from the program. The president added that 60% were Pell Grant recipients. The top Democrat also noted that 45% of borrowers would see their balances completely paid off.
Economic Impact
The White House reportedly targeted the relief, rather than issuing widespread payments, in an effort to minimize impacts on inflation. While many people are undoubtedly ecstatic to hear the news, others aren’t so cheerful as they express concern for the economy. Inflation continues to be at an elevated level, and some citizens are critical of the president’s loan forgiveness, claiming it will give debtors more money to spend and stoke the inflation fire. Others have mentioned Biden’s plan to forgive student debt is a slap in the face to those who worked hard or minimized their expenses to pay for college.
The president didn’t pass the measure through the legislative branch. Instead, Biden used executive actions to forgive the debt, which means legal challenges are likely ahead for the commander in chief.
Some of Biden’s closest aides argued whether the president even had the legal authority to forgive the debt. The officials felt Biden should’ve worked with Congress rather than taking executive action.
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