The Biden Maneuvers with Student Debt - El Comercio de Colorado

By Jaime Florez,

Hispanic Communications Director for the Republican National Committee

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The Biden administration has decided to write off up to $10,000 of student debt for each beneficiary with a personal income of less than $125,000 a year. This figure is more than double the income of the average household in the United States. Biden’s decision is, therefore, another gift from him to the richest, which will end up costing taxpayers billions and, according to recognized experts, will contribute to worsening inflation.

La maniobra de Biden y la deuda estudiantil

Biden’s forgiveness of $10,000 in student debt per person is going to cost all American taxpayers an additional $230 billion, as well as immediately increase inflation and create additional inflationary pressure over time. Biden has already extended the student loan moratorium four times in a move that former Obama economic adviser Larry Summers has called “highly problematic” arguing that cancellation of student debt is “highly regressive” and likely to contribute to “inflationary pressures.” By writing off billions of dollars in student debt, Biden only benefits the wealthy and does little to help future college students, borrowers who have already paid off their loans, and those who never got to go to college to begin with.

Forgiving student debt will deepen economic inequality, as nearly two-thirds of all student debt is owed by the top 40 percent of households. According to Adam Looney, a senior fellow at the Brookings Institution, a blanket cancellation of a student loan would be the equivalent of “a tax cut for high-income, college-educated households.” For many low-income borrowers, paying off $10,000 of debt would have “no impact on their monthly student loan payments.” In other words, it would be nothing more than a gigantic welfare program for the bourgeoisie” because 40 percent of student debt is in the hands of students with advanced degrees like doctors and lawyers.

With this measure, Biden is helping to increase the cost of college for all future students. Experts warn that more Americans may apply for student loans with the expectation that their loans will be forgiven in the future, encouraging colleges to raise tuition costs even higher. Forgiving student loans will penalize those who budgeted responsibly so they did not have to borrow any money, and those who paid off their loans in a timely manner.

When Biden’s decision was announced, Ronna McDaniel, Chairwoman of the Republican National Committee (RNC), said that “this Biden bailout is for the rich.” And she added that “as hardworking Americans struggle with soaring costs and a recession, Biden is giving a handout to the rich. Biden’s bailout unfairly punishes Americans who saved for college or made a different career choice, and voters see right through this short-sighted, poorly veiled vote-buy.”