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Biden’s Plans to Cancel Student Loan Debt Will Make Things Worse

Biden’s Plans to Cancel Student Loan Debt Will Make Things Worse

“Who would ever pay off a student loan ever again after this blanket forgiveness program?”

Democrats are just giddy about Joe Biden’s plans to cancel more student loan debt. They see his polls and the fact that young voters are deserting him and they think this will help.

But who will really benefit from this? Not the people it’s intended to help.

Maya MacGuineas of the Committee for a Responsible Federal Budget (CRFB) recently spoke to FOX Business:

Biden canceling student debt would make inflation worse, experts warn

The inflation crisis in the U.S. will only worsen if President Biden cancels large swaths of student debt, experts warn.

Maya MacGuineas, president of the Committee for a Responsible Federal Budget (CRFB), warned that student “debt cancellation may be an extremely appealing political talking point, but it is not good policy.”

“It is costly, inflationary, poorly targeted, and fails to address the root problems in our higher education financing system,” MacGuineas said in a statement Thursday. “Full debt cancellation would be a massive hand-out to rich doctors and lawyers, would worsen our inflation crisis, and would cost almost as much as the entire 2017 tax cuts.”

“Even partial debt cancellation would be costly, regressive, and inflationary,” she continued. “Forgiving $10,000 per person of debt would cost as much as universal pre-K or a full extension of the expanded ACA subsidies.”

Trump economic adviser Stephen Moore calls it “the biggest giveaway in American history.”

He writes in the Washington Examiner:

Canceling student loan debt would make college more expensive

It might be the biggest giveaway in American history. President Joe Biden wants to cancel more than $1 trillion of outstanding student loan debt. Biden has already delayed for more than a year student loan repayment, and under his new rules, most delinquent and deadbeat borrowers would NEVER have to repay.

What a deal for the people who never paid a dime back of the tuition money they owe to Uncle Sam.

This plan makes suckers out of the millions who have felt honor-bound to pay off their debts. My wife spent years after graduating from college diligently writing checks to pay off the tens of thousands of dollars of loans. That’s the way it works when you borrow money and you’ve signed a commitment to pay the money back.

Think about what would happen if this loan repayment policy were to be implemented. Who would ever pay off a student loan ever again after this blanket forgiveness program?

The New York Post Editorial Board calls it a bribe:

Biden’s bribe to the affluent: student loan forgiveness

The rich get richer, the old saying goes. And President Joe Biden wants to keep it that way.

Case in point: The White House has announced a major move on student debt, canceling it for almost 40,000 borrowers and bringing 3.6 million closer to forgiveness. Yet student-debt relief mainly benefits the better-off.

Yes, like much of the progressive agenda, this is packaged as “equity” — with a massive contingent of Democratic legislators calling for relief late last month as a way to “advance equity as our nation works to rebuild a stronger and more equitable economy.”

But look at the numbers. A January paper from the left-leaning Brookings Institution showed just how unevenly student debt is distributed, with almost a third of all US student debt owed by the wealthiest 20% of households, while the bottom fifth of earners owe less than 10% of such debt.

Students with advanced degrees — doctors, lawyers and the like — hold 40% of the debt.

Now is a good time to revisit this video from January of 2020 where a father confronts Elizabeth Warren on this issue and asks if he is going to get back the money he paid for his family’s student loans.

Democrats think this is going to help them. They’re wrong.

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Comments

Schumer proposed linking “free” education with a percentage of income being taken to “pay back” the student “loan”. Welcome to the perpetual student going from degree to degree … all of which don’t have much to offer in the market. If all degrees were “equal” and all money makers… fine… but they aren’t. It’s like paying student athletes a salary…. for the high enders their value is great but for the rest, their scholarship was more valuable in getting a degree than salary and out. Student loans made it easy for schools to boost the cost of an education without increasing its worth. If the easy street of government loans was gone and colleges/universities had to compete… well… that would change everything.

Speaking as someone who will benefit quite a bit from the cancellation of my student loans, the above analyses are basically correct. I accrued that debt while getting a degree that has been very good for my career.

I’m not a doctor or lawyer but I make enough money to have made regular payments on my student loans and a mortgage at the same time. Removing that chunk of debt will be very good for me. We might even remodel the kitchen!

But as a bribe it will be ineffective. I haven’t voted for a democrat in decades and almost certainly never will.

    LibraryGryffon in reply to irv. | April 30, 2022 at 12:25 am

    Same thing I’m thinking. I’ve got debt from my latest career change and yes, having $10K disappear would be lovely, but it sure won’t get me to vote for them. Especially since their policies (the PPACA in particular) are why I’ve had to retrain.

      tbonesays in reply to LibraryGryffon. | April 30, 2022 at 6:33 am

      Bribery is illegal.

      Regardless, every lender in history has to settle repayment by a percentage. The US government is no different.

“Who would ever pay off a student loan ever again after this blanket forgiveness program?”
“Democrats think this is going to help them. They’re wrong.”
No you’re wrong.
Kids will continue to take out student loans because there’s no downside to them.
Schools will continue to participate, for the same reason.
The government will continue to turn the student loans into an entitlement program, because it funds their propaganda mills.
The only loser here is the taxpayer, and he has no effective control over whether this program continues or not.
So for the Democrats, this is a “win, win, win, fuck you deplorables.”
And that’s the best kind of win.
You can bet your bippy they will be continuing this.

d/prog – ‘hey let’s make college free’
Taxpayers – ‘too costly + benefits skew to the affluent’
d/prog – ‘I have an idea’

This whole thing on student loans is a microcosm of the entire conservative/liberal disconnect.

I’m honestly tired of conservatives acting like Democrats DON’T KNOW that cancelling student debt would be catastrophic economically, and that a reasoned demonstration of just how stupid an idea it is, will win them over.

It’s not that they don’t know it would be a catastrophically bad decision. They know, and THEY DON’T CARE.

They’re going to do it anyway to buy votes, and fuck the future as long as they get to stay in office.

    Ironclaw in reply to Olinser. | April 29, 2022 at 7:41 pm

    The argument is not being made for the benefit of the stupid communists. We know they know, we know they don’t care. It’s for the benefit of the independents that are watching.

“Biden’s Plans to Cancel Student Loan Debt Will Make Things Worse”
This is a surprise?
Any Biden plan that doesn’t make things worse gets sent back for rewrite until it does.

GI bill. You serve your country first and earn your education next.

How is this even legal for a president to do?

    ThePrimordialOrderedPair in reply to slagothar. | April 29, 2022 at 6:32 pm

    The same way it was legal for the CDC to declare a moratorium on evictions. We are ruled by whim, these days. There are no laws.

    henrybowman in reply to slagothar. | April 29, 2022 at 8:01 pm

    The day the federal government got into the business of making private educational loans — a flagrant violation of the constitution right off the bat — this door was always open.

I don’t mind the government forgiving loans but with this caveat. The real problem are schools recklesssly raising tuition saddling students with unsustainable debt and who have little chance of obtaining an adequately paying job. I believe for each loan forgiven, the schools should either have to pay for the forgiven amount, the schools lose their non-profit status, and/or the amount forgiven is considered taxable income of the school.

The Democrats planned this when they took over student loans. The goal is free education and that education will be worthless in the end.

    henrybowman in reply to r2468. | April 29, 2022 at 8:02 pm

    Exactly. This is the educational variant Obamacare, won (unlike Obamacare) without a shot fired.

ThePrimordialOrderedPair | April 29, 2022 at 6:31 pm

All leftist plans are designed to make things worse; to destroy everything, if they are successful.

Faux Freedom | April 29, 2022 at 7:19 pm

I took out student loans decades ago which taught me a lot about how government programs really work.

First, I was offered grants, but believing it was immoral to take free money from taxpayers, I took loans to pay my some of my bills. I worked full time to pay tuition and ended up with $20 a paycheck left over after making my tuition payments. Then, since I had a job, I had to pay income tax on what I had earned instead of taking free money.

After I learned that, I didn’t give one damn whether I ever paid the loans off or not. NOT ONE DAMN.

But that wasn’t the end of my learning.

At some point, with some intervening excitement I won’t elucidate here, I began my career. And started paying back the loans. I don’t remember how many I had, 2, maybe 3. Anyway, I began paying them off. So then, Congress or someone, created a “program” where you could “consolidate” them. I did this. This was when interest rates were quite high. So my interest rate was about 8 or 9%.

A few years after I did this, they created a NEW “program” where borrowers could “refinance” the loans and get a much lower interest rate, I think 3% or 4%, but everyone in my cohort, we were not permitted to get the lower interest rate. So when inflation and all interest rates finally went down to bearable, non-Weimar rates, I was stuck at this higher rate.

So when I was 18 or 20 or whatever age, I didn’t appreciate that Congress/government could/would manipulate all this so much. So quite frankly, I learned about the complete arbitrariness of government programs.

Then I noticed that they never did serious collections. As far as I could tell, they never filed suits or filed liens, or did garnishments. I noticed the government got so bad at collection – because they really didn’t do any — that they then made student loans non-dischargeable in bankruptcy. Yes, I’ve watched this flow of events for a very long time.

So, since paying the income tax on what I earned for tuition made me opposed to how I was treated, when I saw they weren’t doing serious collections, I decided I wasn’t going to be overly concerned about making payments. Besides, as a student of our financial system, I figured at some point, inflation would take care of my problem and make my debt smaller.

And it has.

Yes, I learned a lot from getting student loans. Namely, that when our government gives out money under a power the Constitution doesn’t enumerate, the problems grow and grow and grow on top of each other. And that people who come up with these programs have never heard of “unintended consequences.”

Dolts. I look forward to the IRS sending me a refund of my taxes for this, and for the other mistakes it made on my returns.

I am skeptical that this gains them any votes that they would not have gotten anyway and will cost them some votes of people who have paid off their loans.. Whatever number he picks will have people correctly thinking that they could have had that extra cash in their hands then if they had not been as responsible. If the number is something like $10,000 forgiven, there will be a lot of very angry people.

Before everybody freaks out about the consequences of Biden’s plan, I’d just like to point out that there is no plan, just a bunch of nonspecific teasers dangled in front of the Democrats’ base.

Hum, well I had to pay for my own college. No real scholarships. I did qualify for work aid, but if I worked for that aid, I would not have had enough money to keep going. It took me 11 years to get my BS. I paid my loans and my wife’s loans. I bought a very old used car. I learned to work with what I had and I did not expect a hand out. The unfairness to those that paid their way and the ones that did not go to college is maddening. It is just a way to paid off the elite liberal professors and administrations on government welfare to indoctrinate us at the expense of those who have worked hard. What they are doing is worst than the British did to the colonies.

    amwick in reply to MarkSmith. | April 30, 2022 at 8:53 am

    I had to pay my way too… I qualified for scholarships and aide because my father died and we were poor. I did work study for five years, and summer jobs.

    IIRC the student loans I took every year were from a local bank. Different times.

Full debt cancellation would be a massive hand-out to rich doctors and lawyers

Exactly as planned. We all know those are major Democrat donor classes, who will have a lot more money to donate when their loans are canceled.

My shocked face is worn out.

Virtually everything the fool/tool that is Biden makes our country worse. Our nation is strong, I pray we are strong enough to outlast this incompetent group of idiots who masquerade as politicians.

Think of the poor women who majored stupid majors who have to marry a dweeb to get their student loans paid off. They actually have to live with the jerk until he finally gets around to paying the thing off (and long enough that they have a good shot at a “fair” asset distribution in the divorce).

I say “NO MORE” to making women humiliate themselves in this way.