In a move critics have condemned as trying to buy votes for the 2022 midterms this November, in which Democrats are expected to lose significant ground in Washington, Joe Biden on Wednesday announced plans to cancel student loan debt of up to $20,000 per student.
His move also has been described as a huge middle finger to those who already have paid off their 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.
I’ll have more details this afternoon. pic.twitter.com/kuZNqoMe4I
— President Biden (@POTUS) August 24, 2022
On social media, Biden claimed he was “keeping” his campaign promise by announcing a plan to forgive $20,000 “if you went to college on Pell Grants,” and $10,000 if you didn’t get them.
He also said “forgiveness” only applies to those “earning less than $125,000. And there’s nothing for those who have paid their loans off.
Further, the student loan pause, initiated because of the COVID-19 pandemic, has been extended again, this time through Dec. 31, 2022.
The Washington Examiner said about 40 million people in the United States hold $1.7 trillion in student loans, and conservatives are predicting a backlash as blue-collar workers don’t have student loans, and now will be on the hook to pay off the educations of those who obtain “gender students” degrees.
“What does it say for all those folks? Boy, you were really stupid here,” former Education Secretary Betsy DeVos told the Washington Examiner in June.
Explaining the obvious, the report said, “Democrats hope the move energizes young voters in a nonpresidential election year, yet there is disagreement on that side over how far to go. Groups such as the NAACP and legislators, including Sen. Elizabeth Warren, have called on Biden to shift $50,000 or more per borrower onto the public debt, with some even saying $10,000 per borrower is a form of structural racism because black borrowers have higher average balances.”
Taxpayers are estimated to be on the hook, thanks to Biden, for between $300 billion and $980 billion over 10 years. Most of the benefits will go to the top 60% of income earners.
The White House has failed to lay out plans to make sure future students do not rack up similar debts.
Republicans have pointed out that those in the Biden administration personally hold millions in student loans, and will benefit personally from Biden’s move to shift the debt from borrowers to taxpayers.
Former Bush White House ethics lawyer Richard Painter told the Examiner such a move could be not just unethical but illegal.
Others also have raised the question about whether Biden has the authority to cancel debts owed to the government without congressional action. House Speaker Nancy Pelosi, a Democrat like Biden, takes that position.
Fox News reported the bulk of the canceled loans likely will be added to the national debt, now at $30.7 trillion.
The New York Post said progressives in Biden’s own party had urged him to forgive up to $50,000 for borrowers.
“Hardworking Americans are now responsible for paying off the student loan debt of others,” Rep. Drew Ferguson, R-Ga., said on social media. “Biden’s fundamentally unfair proposal comes at the expense of taxpayers – many of whom have fully paid off their student loans.”
And Rep. Ralph Norman, R-S.C., said, “Student debt cannot be ‘canceled.’ Whether it’s the federal government or a private lender, you don’t just erase loans off the books. All Biden is doing is saddling OTHER PEOPLE with that debt.”
“Student loan cancellation is an election-year handout to the affluent elites that support Democrats — and it’ll use YOUR money,” Rep. Dan Bishop, R-N.C., said.
Economists also have warned it will made Biden’s inflation, most recently in the 8% to 9% level under revised measurements that actually minimize the problem, worse.
“Mass cancellation of student debt feels good to some, but it’s a slap in the face to people who sacrificed to pay loans, worked through college, went to a less expensive school or skipped college altogether,” said Rep. Lee Zeldin, R-N.Y. “Magically canceling loans is bad, far left policy & just flat out wrong.”
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