Biden’s Handout To The Rich: Bailing Out Their Student Debt

Biden’s Plan To Cancel Student Loans Would Bailout The Wealthy, Worsen Inflation, And Line The Pockets Of Democrats And Their Staffs, All At The Expense Of The Working Class

BIDEN’S STUDENT LOAN BAILOUT – A HANDOUT FOR THE RICH, HIGHER PRICES FOR YOU

• Biden is reportedly planning to cancel up to $10,000 of student debt per borrower, a handout to the rich that would cost taxpayers billions and worsen inflation.
  • Simply extending the pause on student loan repayments through the end of the year would cost taxpayers an additional $20 billion and worsen inflation.
  • Biden’s plan to cancel $10,000 in student debt per person would cost American taxpayers an additional $230 billion.
  • Biden’s plan to cancel student debt would immediately increase inflation and “create additional inflationary pressure over time.”
• Biden has already extended the student loan moratorium four times.  
  • Former Obama economic advisor Larry Summers called Biden’s decision to extend the moratorium “highly problematic,” saying student debt cancellation is “highly regressive” and likely to contribute to “inflation pressures.”
  • Former top Obama economic advisor Jason Furman: “The perpetual deferral of interest on student loans is just about the worst policy. It is costly, unjustified, and has added to inflation.”
• Biden’s plan to cancel billions in student debt would benefit the wealthy while doing “little to help future college students, borrowers who have already paid off their loans and those who never went to college in the first place.”

BIDEN’S STUDENT LOAN PAUSE HAS ALREADY COST TAXPAYERS BILLIONS

• Already, the current pause on student loan payments has cost American taxpayers nearly $300 billion, with “most of these costs” accruing under the Biden administration.
• Extending the repayment pause to the end of the year would cost $20 billion, and extending the moratorium even further would cost an additional $50 billion per year.
• Biden’s pause on student loan repayments is “an extremely regressive policy, and each month the pause is extended the policy becomes more cumulatively regressive.”
  • By stopping interest accumulation, the student loan moratorium “effectively cancels some debt.”
• If Biden extends the pause another year, the benefits will primarily go to wealthier Americans with higher paying jobs.
  • Medical school and law school graduates would receive the largest benefit, effectively receiving $90,000 and $55,000 in debt cancellation respectively. 

CANCELING STUDENT DEBT IS A HANDOUT TO THE WEALTHY

• Canceling student debt would worsen economic inequality as nearly two-thirds of all student debt is owed by the top 40 percent of households.
  • “All serious economists agree” that student loan forgiveness is regressive.
  • Brookings Institution Senior Fellow Adam Looney: a blanket student loan cancellation would be the equivalent of “a tax cut for high-income, college-educated households.”
• For many low-income borrowers, $10,000 debt cancellation would have “zero impact on their monthly student loan payments.”
• Student loan cancellation has been referred to as “a giant welfare program for the bourgeoisie” because 40 percent of student debt is held by students with advanced degrees such as doctors and lawyers.
  • Biden has even acknowledged that Democrats’ student loan policies would “disproportionately benefit students who go to ‘elite’ private colleges.”

WHO BENEFITS? DEMOCRATS AND THEIR STAFF

• Far-left Democrats in Congress who support student debt cancellation, including Reps. Alexandria Ocasio-Cortez, Jamaal Bowman, Rashida Tlaib, and Ilhan Omar, would all benefit if Biden cancels student debt.
  • Despite making $174,000 per year, these Democrats want taxpayers to foot the bill for their debt.
• At least 30 of Biden’s White House aides have student loan debt, meaning they stand to directly benefit from Biden’s action.
• Only 38 percent of young Americans support canceling student loan debt.

STUDENT DEBT CANCELLATION WOULD WORSEN INFLATION

• Canceling student debt and extending the student loan pause would both increase inflation according to the Committee for a Responsible Federal Budget.
  • With historically high inflation, Americans are already paying more for just about everything.
• A CNBC survey found that 59 percent of Americans worry that student loan forgiveness would worsen Bidenflation.
• Even liberal economists have said that canceling student debt and extending the student loan pause makes inflation worse.
  • Obama economist Larry Summers: “student loan debt relief is spending that raises demand and increases inflation.”
  • Former top Obama economic advisor Jason Furman: “The perpetual deferral of interest on student loans is just about the worst policy. It is costly, unjustified, and has added to inflation.”

BIDEN’S BAILOUT IS UNFAIR TO FUTURE STUDENTS AND THOSE WHO PAID OFF THEIR DEBTS

• Experts across the political spectrum agree that Biden’s plan for student debt will be unfair to those without a college degree and those who have already paid off their student debt.
  • Former chief economist at the Department of Labor, Diana Furchtgott-Roth: “Forgiving student loans is unfair to students who have paid off their loans; unfair to students who have chosen less expensive community college options; unfair to taxpayers whose dollars are paying off the loans and who have no college education.”
  • Economics professor at Ohio Northern University, David McClough: “Debt forgiveness is not fair, but more importantly, it is bad policy. It distorts incentives and encourages behavior that contributed to the ‘problem’ that it seeks to address.”
  • Economics professor at University of Wisconsin-Milwaukee, Rebecca Neumann: “Simply eliminating a particular balance can be seen by some as unfairly advantaging those who have gone to college at the expense of those who have not.”
• Canceling student debt would “do little to help future college students, borrowers who have already paid off their loans and those who never went to college in the first place.”
• Biden’s proposal would unfairly force Americans who made a “conscious decision not to attend college to avoid debt” to pay off the loans of those who did.

BIDEN’S PLAN WOULD DO NOTHING TO MAKE COLLEGE MORE AFFORDABLE

• The move would increase the cost of college and create a “moral hazard” for all future students.
  • Experts warn that more Americans may take out students loans with the expectation their loans will be forgiven in the future, encouraging colleges to raise tuition even higher.
• Canceling student loans would penalize those who responsibly budgeted to pay off their loans.
  • Carlo Salerno of CampusLogic said, “it would reward the person who ‘borrows to get a Ferrari over the one who got a Kia.’”
• Biden’s plan is a “one-time mechanism” which does not address the root problem of the high cost of education.