Biden’s Liberal Payoff: Canceling Student Debt

Biden Is Signaling He Will Cancel Student Loans, A Regressive Policy That Would Fuel Inflation And Mostly Benefit The Wealthy

BIDEN WANTS TO CANCEL BILLIONS IN STUDENT DEBT

• Biden has caved to the most radical members of his party and is now looking to cancel federal student loan debt on a “large scale.”
  • This is despite Biden’s previous statement that he doesn’t “have the authority” to cancel student loans.
• Since the start of his presidency, Biden has taken steps towards student loan cancellation like extending the student loan moratorium.
  • In April, the Biden administration extended the student loan moratorium for the fourth time.
  • Former Obama economic advisor Larry Summers called the move “highly problematic,” saying it was “highly regressive” and likely to contribute to “inflation pressures.”
  • Summers: “Most all serious economists are in agreement that across the board debt reduction is regressive.”
• Already, the current pause on student loan payments has cost American taxpayers over $100 billion – about $4.3 billion per month.
• In total the federal government owns more than $1.6 trillion in student loan debt that could be wiped out at the expense of taxpayers.

DEMOCRATS ARE PUSHING BIDEN TO PROCEED WITH DEBT CANCELLATION

• Biden has put Democrats’ radical “wish-list” before the American people – only 38 percent of young Americans support canceling student loan debt.
• A coalition of 239 left-leaning groups called on Biden to cancel student debt on “Day One.”
• Elizabeth Warren (D-MA) wants Biden to use authoritarian power to accomplish this controversial policy action, saying “not everything has to go through Congress.”
• Members of the far-left Squad have yet to pay off their student loans, instead waiting for Biden to cancel them.

BIDEN’S AGENDA IS A HANDOUT TO THE WEALTHY

• Canceling student debt will have an adverse effect and 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, including the far-left Brookings Institution.
  • Anything from partial to full student debt forgiveness would disproportionately benefit the wealthy.
• For many low-income borrowers, $10,000 debt cancelation would have “zero impact on their monthly student loan payments.”
• Biden’s agenda would require low-income individuals to pay off the debt of higher earning college graduates.
  • A person in the top income bracket would receive five times more in cancelled debt than an American in the bottom bracket.
• 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 acknowledge that Democrats student loan policies would “disproportionately benefit students who go to ‘elite’ private colleges.”

STUDENT DEBT CANCELATION WOULD FURTHER FUEL INFLATION

• With inflation at a 40-year high, Americans are forced to pay more for just about everything.
  • Inflation is now costing the average American family an extra $536 per month compared to when Biden took office according to Congress’ Joint Economic Committee.
• As inflation continues to slam hardworking Americans, Biden’s plan to cancel student loans will only further fuel historic price increases.
• According to the Committee for a Responsible Federal Budget, canceling all student debt would significantly increase inflation.
• Economists warn that extending the “payment pause” will make inflation worse.
  • Ben Ritz, the director of the Progressive Policy Institute’s Center for Funding America’s Future: “From an economic perspective, it’s a very bad decision… It’s very expensive, it’s inflationary, it’s regressive.”
  • Larry Summers: “this approach is regressive, uncertainty creating, untargeted and inappropriate at a time when the economy is overheated.” 
• Widespread student debt cancellation would have a negligible impact on the economy and produce “only 2 to 27 cents of economic activity for every dollar of cost.”

BIDEN’S PLAN WILL DRIVE FUTURE DISPARITY

• 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 a stranger.
• The move would increase the cost of college and create a “moral hazard” for all future students.
  • A study showed that increasing federal subsidized student loans leads to a 102 percent increase in college tuition.
• 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.