Biden plans for $10,000 student debt forgiveness

"On Wednesday, President Biden announced a sweeping effort to forgive up to $20,000 of federal student loan debt for Pell Grant recipients, and up to $10,000 for other qualifying borrowers. Biden also extended the federal student loan payment pause through Dec. 31.

"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," Biden said in a tweet on Wednesday."

https://www.npr.org/2022/08/24/1118879917/student-loan-forgiveness-biden

thoughts on why this is a great or terrible idea?

Damn, I was literally just about to post this and eat crow due to my last comment. I really believed this was going to be an unfulfilled campaign promise that was going to be dangled for the next presidential election or the midterms.

Between this, the Inflation Reduction Act which is the largest climate change spending bill in history as well as a health care cost reduction bill, and the bipartisan infrastructure bill a few months ago, my lackluster feelings towards this administration have really turned around. Well done Joe!

@Serraph105: Same. I still say there were at least five better candidates to choose from in 2020, but Joe has been doing alright.

Not necessarily a huge fan of it...conflicted at best. The root cause is still overpriced college tuition which this does not address. We'll be back in this spot shortly since the issue wont be fixed. Additionally, it's a bad time given this is nearly 300 billion in relief, albeit it delayed, which is inflationary in some respect (will be minor). I would feel better if the offset were financed through tax increases of some kind.

Then again, the same people complaining about this support constant subsidies to industries they like, or bailouts with little to no expected repayment or interest applied (I'm looking at your PPP).

I think a better piece of news that was recently brought to light is that our reconciliation bill helped clear the way for the EPA to start regulating carbon, as there was a setback with a recent SC ruling. The bill included language that explicitly calls out carbon emissions from energy product as a pollutant, thus the SC ruling wouldn't apply since it was addressed via law.

Waiting for the "but I paid my way through college" crowd...

Yes, I feel the same.

The issue is overpriced college and predatory loans.

Still...it will provide a lot of relief for a lot of people. No one deserves to be a debt slave for 10+ years because they wanted an education. Education is one of those things that's as good for the general public as it is for the individual, it should be affordable (yes, even the fancy colleges) and it should be encouraged if someone shows interest.

At the same time, however, I don't think as many people should be going to college as are going.

@mrbojangles25: At least prior to this Biden was sticking to loan forgiveness on scam schools like ITT Tech, Corinthian colleges, etc. (or Trump U lol). Those were glorified diploma mills at best.

yeah didn't ITT have to give back a few billion recently?

Ah yes here it is. Had to cancel almost $4 billion (!!!!!) in debt. Jesus christ.

Don't go to "for profit" schools, folks. I mean I think they're all ultimately for-profit but you kjnow what I mean.

@HoolaHoopMan: Yeah, this isn't the slam dunk win it would have been just a year or two ago. It's not bad, but it's complicated. The right policy at the wrong time, as they say.

For it as it helps working class Americans out. Hopefully that money people save goes back into the economy.

How's the saying go? Perfect is the enemy of good?

You're right of course--this isn't a real solution--but this is a win and frankly Democrats need to take anything and everything they can get.

Band-aid solution that puts money in people's pockets? Do it.

Shitty GOP bro expresses mild regret at decisions? Embrace them and say "Good for you".

Trump guilty of some financial crimes and not treason? Hey that's fine, not as sexy as treason but it still keeps him out of the race.

I think there are some legitimate concerns over doing this to say the least. With that being said, if we compare it to the forgiveness present in PPP, which again, went to companies and rich people, its easy to see who the bad faith actors are. Then again this seems like a move to help retain millennial support which has dropped in polls.

90% of democrats under 30 want him out of office. That's why he did this.

Nothing like some handouts to buy some popularity. :)

@vl4d_l3nin: I'm doubtful you'd get 90% of any group to agree on anything political.

Have you got a legitimate source for that?

@Stevo_the_gamer: I agree with the sentiment of your post. It's hard to not imagine Biden is not hoping to see some gains with Millenials and Gen Z with this.

On the other hand, I do think it's legitimately a moral victory that I have a hard time being cynical about. The federal government, by making subsidized loans widely available while also doing nothing to control the growth of tuition costs, is at least partially responsible for the current mess. And now it's at least doing something to redress that error. I could list ten reasons why it's inadequate and imperfect but right now I feel like any progress is worth celebrating.

I recently returned to further education. Completely confirmed my impression that, with even minor investment in decent online learning tools, the human element is largely a waste of time and resources. Debt forgiveness is fine and all but I feel like there are far, far better and more cost-effective ways of bringing quality affordable education to every American without having to rob Peter to pay Paul.

Imagine people actually being dumb enough to believe there's such a thing as "free" money. To believe the people who signed the laws to make college expensive in the first place and legalized predatory loan practices by the banks (who no doubt lobbied for it) are going to save you from the mess they created, you just have to give them more power to do so.

Imagine actually being naive enough to believe that the inflation and the taxation skyrocketing because of dumb shit like this and the inflation act isn't going to cost you way more than $10-$20k over the next decade, and that, going well beyond what you owed in the first place, that debt, inflation, and taxes will be there to ensure your children and grandchildren will never have the opportunity to afford to squander a chance at going to college.

Imagine actually falling for the "vote for us, we'll give you money" nonsense. ROFLMAO.

If you want to go party at college for four years, go for it. But do so on your own dime, and do not expect anybody else to pay for it.

Where do you think the government gets this money from exactly? Tell me, what is "moral" behind forcing people who made better decisions in life to pay for your mistakes?

This you?

@eoten: Countries that treat higher education more as a public good due tend to see a lot of benefits. I suspect you don't care about this though.

You are unlikely very to pay anything for this particular program however. The money is already out the door; this is a matter of the federal government passing on future revenue. That revenue would equate to 300 billion, collected over a decade, if not longer. The actual amount may be lower than 300 billion given that some would never be paid back due to default/other forgiveness plans. So in all, >$30 billion on an annual basis, which is a trivial amount compared to the $4 trillion collected in annual revenue.

I really don't believe Conservative objections to this come down to a concern for fiscal responsibility or a concern for fairness in taxation though. I seem to remember a lot of celebrating after Trump passed a tax cut that netted individual billionaires hundreds of millions of dollars...

What do other countries have to do with anything. I asked a very simple question. What is "moral" about government forcing somebody else to pay off your responsibilities? And those tax cuts netted lower and middle class families a lot more money in tax breaks too. Media focused on "but... rich people got tax breaks too!" as a means to erroneously claim they were somehow a tax break for rich people. So disingenuous non-sequiturs aside, what is moral about forcing someone else to pay your bills?

By this same measure why don't we eliminate all education from K-12 and make it out of pocket too? Everyone has to chip in and pay for people attending public schools.

You mean like oil subsidies, farm subsidies that increased under trump due to his ineptitude with the trade war with China, or the PPP money given to profitable organizations and Kushner?

Color me surprised. Didn't expect it to happen, it seemed like a failed/lie from his campaign that would not come to light.

He or the next president really need to address education in a big way. Address the root causes and invest in making public education better, and secondary education more affordable.

@eoten: I didn't answer your question because its premise is incorrect. This program's impact on non-borrowers will be negligible if not non-existent for the simple fact that its overall cost is very small i.e. less than 1% of annual federal revenue. Perhaps the moral question you bring up would be worthwhile if the program were likely to cause higher taxes or inflation but that simply isn't the case.

The premise is not incorrect. You can try to twist the reality around all you want and pretend there is some moral high ground here, but money isn't free. The money spent for you to go college has to come from somewhere. Those colleges and teachers aren't working for free. Those grants come from taxes. That means everyone is paying for those. Other people were paying money so you could go to college, and instead of paying that back, you're going to claim some kind of moral high ground because one of the most amoral people in public office is telling you that you don't have to?

There is absolutely nothing moral about making someone else pay your bills. If you took out student loans, that's YOUR responsibility to pay back. Nobody else should have to pay it back for you. You are not entitled to your neighbors wallet.

no no no, you don't get it.

they're "job creators!!!!!"

all hail and bow at the alter of the job creators!

Meanwhile,

AP FACT CHECK: Blue high-tax states fund red low-tax states | AP News

In fact, most high-tax states send more money to Washington than they get back in federal spending. Most low-tax states make a profit from the federal government’s system of taxing and spending.

Connecticut residents paid an average of $15,643 per person in federal taxes in 2015, according to a report by the Rockefeller Institute of Government. Massachusetts paid $13,582 per person, New Jersey paid $13,137 and New York paid $12,820.

California residents paid an average of $10,510.

At the other end, Mississippi residents paid an average of $5,740 per person, while West Virginia paid $6,349, Kentucky paid $6,626 and South Carolina paid $6,665.

Low-tax red states also fare better when you take into account federal spending.

Mississippi received $2.13 for every tax dollar the state sent to Washington in 2015, according to the Rockefeller study. West Virginia received $2.07, Kentucky got $1.90 and South Carolina got $1.71.

Meanwhile, New Jersey received 74 cents in federal spending for tax every dollar the state sent to Washington. New York received 81 cents, Connecticut received 82 cents and Massachusetts received 83 cents.

Seems like you're just mad at it because this time it's spending you don't subjectively like.

Which is false as we saw during Trump, and their response to Biden's deficit reduction. It's actually about them subjectively just not liking where the spending is going. Not the actual spending. Typical partisan politics and tribalism.

Your argument on the moral issue is very, very silly. It's broad enough that you could use it to argue against any government program, including public K-12 education.

Public spending on things that benefit society overall is a moral good in my book. Accessible higher education is obviously a benefit to society and this program is a step in the right direction. Perhaps you don't agree but I suspect you also take the fact that we don't live in an Ayn Rand Objectivist hellhole for granted.

Your motives and those of other conservatives are suspect to me though. Where is the moral outrage over the wealthy paying little to no taxes? Where is the outrage over corporations doing the same? Why did Conservatives oppose a bill that would help rectify the fact that Medicare essentially writes a blank check to pharma companies?

@Stevo_the_gamer: I will take advantage of this if it passes. I still owe like 14k. Im done paying it back now. I'm going to wait and see what happens. If it goes through I'll take 10k in relief.

If they are going to print money regardless I'll take it. Everything else is getting crazy expensive.

Still going to try and vote out Democrats and going to keep pushing for Trump 2024.

I'm a millennial who just turned 30. Biden wont get any support from me because of this.

Ive been paying off my student loans monthly. Not anymore though. Might as well take the 10k.

If they are going to pay 10k of it then they can. Ill pay the remaining 4k out of pocket and be done with it.

Im trying to save for a house anyway and because of inflation and supply chain issues getting a house right now is a mess.

I work for a contractor and have watched material costs soar as well as time frames for materials get dragged out.

This was due to lockdownerism, during Covid 19 hysteria, the FED paid people to stay home and not work. Demand only went up. Supply has only went down. Buying a house new is unrealistic as well as buying used is now an inflation nightmare its a rip off, inflated equity with high interest rates. No thanks ill pass.

Lockdowns were a mistake, it did not stop covid and made a mess of not only our economy but the worlds economy.

They were wrong, but they will never admit it. People are hurting, inflation is hitting people hard, even if you make 10% more money now compared to before covid 19 lockdownerism your dollar worth is so much less it doesn't matter.

They keep printing money.. its a ticking time bomb. I read the FED has spent more money in the last 3 years than the previous 100 years combined.... yeah my generation will get fucked hard. Major mistakes have been made on a global scale. Now that people are getting crushed they decide to start giving out this relief to younger people struggling. Its like having someone stab you and offering rubbing alcohol to stop the infection.

I'm not going to say thank you...

This was due to Biden.

This was not due to Biden.

@zaryia: I blame Lockdownerism

Democrats IN particular for pushing so hard for it

It's not silly at all. You're the one who claimed the moral high ground, yet refuse to see the truth behind what is really going on. A failure of a president, with historically pathetic approval rating is hoping to buy support and approval with promises to take from everybody else and give to the irresponsible types such as yourself. And you've actually convinced yourself there is something moral behind it because you think it'll cost less overall. Cost less to whom though? To people with debts, sure. But to the people without them it's going to cost more.

Just because you think you can spend someone else's money better than they can, doesn't make it "moral" for you to take it from them. There is nothing moral behind your position, so stop pretending it is so you won't feel guilty about other people paying the bills that you won't.

@eoten: Your ethical framework would preclude any and all public spending on education, healthcare, the economy, basically everything that makes modern life possible. You seem to value only an individual's right to control their own money and have no regard for overall quality of life. Yeah, that's silly.

Oddly enough I didn't see the usual suspects whining about PPP loan forgiveness for the wealthy or Republicans in Congress. Why is that?

Someone on tv/youtube/twitter told them to like that, but hate this. It's literally as simple as this.

Sheep with no critical thinking skills then...

MTG Calls Student Loan Relief Unfair Despite Having PPP Loans Forgiven (businessinsider.com)

Marjorie Taylor Greene criticized Biden's student loan forgiveness plans as "completely unfair," despite records showing that her own company had $183,504 worth of Paycheck Protection Program (PPP) loans forgiven in 2020.

She added that she opposed the student loan program in place in the US, saying: "There should not be a system in place that allows them and encourages them to pile up massive debt in these big colleges and universities."

Data from ProPublica, a tracking site that uses data from the Small Business Association, shows that Taylor Green was one of several Republican members of Congress who had private loans forgiven. The data shows that the total amount forgiven was $183,504, which represented full forgiveness of the original $182,300 loan plus the accrued interest.

For Some Student Loan Plan Critics, College Was Cheaper | Time

It's just cult like tribalism.

Some economists disagree with that,

Actually, Canceling Student Debt Will Cut Inflation - The Atlantic

What Forgiving Student Loan Debt Could Mean for the Economy | Barron's (barrons.com)

What Biden's student debt plan will do to the US economy - CNN

Also when we spent money in Ukraine you got mad, saying it wasn't being used for Americans. But whenever Biden uses it on Americans, you get even more angry. Weird.

The money has to be spent on a selected few Americans.

I don't think all Americans obviously have strict puritanical values like we used to way back in the day, but I think we do have things that trend in that direction. Work excessively hard, suffer for what you want, everyone has to endure some sort of grueling trial to prove themselves...things like that.

We see stories abut 90-year olds working at Chik-fil-A and we portray it as a heartwarming story. We celebrate people getting out of debt after 40 years like it's some triumph when we should be working to question why that person had to be in debt for 40 years?

. Suffering is not necessary, being in debt for most of your life is not necessary. It doesn't help anyone but the banks, schools, and financial institutions get rich (and they're fine already, they don't need more money) and keeping people in debt doesn't help the economy.

TL:DR: people shouldn't have to suffer in debt, and getting those people out of debt get's them spending money on goods, services, and homes (i.e. generating tax revenue) instead of paying back banks.

Same thing with wage transparency. If I find out a coworker makes more than I do, but I'm more qualified, do I get mad at them or the company? Sadly, most people would get upset with the coworker because jealousy and indignation are a natural response. But what we should do is get bad at the company. As Americans, we need to reframe how we look at things moving forward.

@Vaasman said:

Oof. So true it hurts.

The Biden White House is putting Marjorie Taylor Greene, Matt Gaetz and other Republicans on blast for slamming student loan relief, as they had federal loans forgiven. (politico.com)

Student loan forgiveness undermines one of our military’s greatest recruitment tools at a time of dangerously low enlistments.

Ugh, trash takes combined with extreme hypocrisy. As expected.

@mrbojangles25:

"When I give food to the poor, they call me a saint. When I ask why the poor have no food, they call me a communist."

-Helder Camara

I'm coming around on this. All of the analysis I've seen on this indicates the macro effects to GDP and inflation is expected to be very low.

And if the macro effect is virtually non-existent, the micro effect to the beneficiaries' lives win out as there's effectively no downside.

I like that quote though I admit I never heard of it's author.

Was he a communist?

I see you didn't understand that quote.

For starters erasing debt =/= lesser inflation, when mortgage companies/banks see you have debt erased by this act it's not gonna boost your credit score so instead of seeing that you paid it off yourself they won't give you a good rate compared to someone who paid it on their own.

As for everyone else they are gonna see "oh these people have less debt now we're gonna hike the price of stuff cause they'll have more money to spend". Inflation is even gonna get worse in a few states cause they are gonna increase the minimum wage in January. EXAMPLE Colorado is going from $12.56 to $17.29, do you think inflation isn't gonna drastically increase? cause if you answered no then you're wrong. There's very little to no laws that combat inflation.

As for Ukraine, that's 40 billion dollars spent on mostly military weapons instead of I don't OUR GOD DAMN INFRASTRUCTURE, education, medical, a proper transportation system like bullet trains. In fact they could have gave every single state (all 50) $300,000,000 for infrastructure or education and it only would have costed them 15 billion.