President Joe Biden announced another round of student loan cancellations.
This round totals $7,700,000,000. Writing it out shows how much money just went down the drain.
The administration has already canceled $167,000,000,000 in student loans.
In 2022, the Supreme Court said he overstepped his authority when he announced he would cancel up to $400,000,000,000 in loans.
The administration found ways to worm around the decision through established “federal student loan forgiveness programs.”
These programs limit the action to “specific categories of borrowers.”
“These discharges are for three categories of borrowers: those receiving Public Service Loan Forgiveness (PSLF); those who signed up for President Biden’s Saving on a Valuable Education (SAVE) Plan and who are eligible for its shortened time-to-forgiveness benefit; and those receiving forgiveness on income-driven repayment (IDR) as a result of fixes made by the Administration,” Secretary of Education Miguel Cardona announced.
The government has to pay the bill. Where does the government get that money? You and me. So we’re paying for our children’s and someone else’s college.
HOWEVER! That also applies to those people who had their loans wiped out. So they’re paying back their loans and others as well.
But the money isn’t free. Sure, it’s government money, which doesn’t seem completely real, but by canceling debt payments the government forgoes future revenue, which adds to annual deficits and the total national debt. Future taxpayers will essentially pay the bill.All told, Biden’s debt-cancellation plans will cost the government $559 billion in foregone revenue over the coming decade, according to analysis from the Penn Wharton Budget Model. Biden is proposing no new revenue to cover the cost, which means it goes straight on top of the pile of what America owes to its creditors.As a portion of the total national debt, $559 billion isn’t all that much — just 1.6% of all federal borrowing. But if treated as a single program, $559 billion is a ton of money, even by Washington’s inflated standards. If Congress tried to pass a benefits package of that magnitude, there would be a huge fight and pronouncements from one side or the other that it’s completely unaffordable. Packages of that size only get passed when there’s an emergency such as COVID or one party controls all the branches of government and has the power to ignore the other party.
“Another 160,000 borrowers and their families will get some much-needed relief thanks to the continued efforts the Biden-Harris Administration to fix the broken student loan system,” boasted U.S. Under Secretary of Education James Kvaal. “We congratulate those borrowers on their due forgiveness and we will continue to work to deliver relief to others.”
And these people truly believe they will never repay their loans because no one understands economics.
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