Submitted by Deirdre Purdy
STUDENT LOANS – Rich Peoples’ Debt, Poor Peoples’ Debt
On the campaign trail in 2020, Joe Biden pledged to cancel at least $10,000 of student
debt per person. “Student debt is holding people up,” he said. “They’re in real trouble.”
That was the catchy part. Behind that was a bigger plan to offer repayment relief on
student loans for low income people.
He hasn’t gotten it all done yet. He’s come up against Republicans in Congress and
conservatives on the Supreme Court. Still he hasn’t quit, and while seeking solutions,
his administration has fixed many persistent problems in the federal student loan
programs that he inherited.
Why is student loan debt such a problem for poor people?
Wealthy borrowers are less likely to default or get behind on their loans because they
have the most access to wealth – family money, financial assets or their educational
degrees.
Although poor people tend to have much smaller debts, their defaults and delinquencies
are much higher because they don’t have the same access to wealth. Millions of
Americans are putting off having children, buying their first home, or starting a business
because they can’t get out from under their student loans.
President Biden’s attempts to work with Congress on student loan debt relief were
thwarted by Republicans who said it wasn’t fair. “What about people who don’t have
student loans? Or people who paid them off? It’s a slap in the face to them.”
Apparently there’s one morality for business people and another for low-income people.
Businesses , including those owned by many congressmen and women benefited when
Paycheck Protection Loans in the hundreds of thousands or millions of dollars were
forgiven. No one asked whether that was fair to ordinary people who didn’t have PPP
loans.
Due to Covid, in 2020 President Trump had declared all federal student loans in
forbearance. Debtors could temporarily stop making monthly student loan payments.
As with any debt, though, if you don’t pay, you still owe. That forbearance ends this fall.
Using the same law that President Trump had used to freeze loans, President Biden
proposed canceling up to $20,000 of debt for low-income students with a Pell grant and
up to $10,000 for those with incomes under $125,000.
But last June, the conservative members of the Supreme Court ruled 6-3 that President
Biden overstepped his authority. Since the time Trump used the law, the Court has
made up a new rule called the Major Questions Doctrine that says if the issues are politically or economically significant, Congress must be more specific when it grants
power to agencies like the Department of Education.
The power the law gave Trump was no longer available to Biden.
(This is a huge power grab by the Supreme Court. But that’s an issue for another day.)
Not daunted, the next day the White House announced that by fixing mismanagement
of the education department’s income-driven repayment plans, 804,000 federal
student-loan borrowers will have their remaining debt wiped out. That’s $39 billion
forgiven.
Even before these actions, Biden had already canceled about $116 billion in student loan
debt for borrowers who were misled by for-profit institutions, borrowers with
disabilities, and those with loans forgiven for doing public service.
In a 3 rd program, the Biden administration will lower monthly payments for low-income
borrowers and offer forgiveness sooner for those who borrowed less than $12,000.
Republicans seem determined to keep Biden from keeping his promises, but Biden is
showing that there are many ways to skin the student-loan cat.
It’s an important part of his economic plan to grow the lower and middle classes and
make the entire American economy stronger.
Hilarious. Your comedy writing shows that your humor knows n bounds. Congratulations.
Hello Diedre. It looks like your heart is in the right place but the reasoning and logic is faulty. The government forgiving student loans is just another attempt to have those that work pay for the decisions of others. You claim that repayment of these loans is a hardship. It prevents those making $125,000 a year or less from buying a home, starting a family etc. People who did not take out student loans have the same issue, only now you expect them to pay for someone else’s college degree. If they do not think their loan is worth repaying, why should the taxpayer. If I take out a home loan or car loan, and later say I was misled into making the purchase, should the government forgive my debt? If we cancel this student loan debt, who are we really helping? You claim the elite. I would argue that you are helping the elite! Who benefits more from debt cancellation. A doctor, lawyer or other professional or the working man and woman trying to put a roof over their heads and feed their families with the tremendous loss of buying power that has been inflicted upon them since Biden took office. Harvard, has over $40,000,0000, yes billion dollars in their coffers. Yet they told their underpaid employees and students to get food stamps and welfare. In life we make choices. Their are benefits and consequences to each one. As you have stated in a previous article, this country was founded in part on capitalism. It seems those with your viewpoint believe that capitalism is only a system to penalize those who work and strive to provide, to pay for those who think they are entitled. I know that the Bible is vied my many as irrelevelant and off topic. But I for one , in the grand scheme of things, make my decisions based on the word. No matter which side of the aisle that decision agrees with. My Bible says if you do not work, you do not eat. It also has a lot to say about reaping and sowing. We are told to help those in need when and where we can. Thank God for food banks and other organizations that are there to give people assistance when circumstances have brought them to a place where they are having a rough time. But that assistance should only be temporary and to help them get back to a place so they can pick up the pieces and move forward. Under the Dems policies, they would keep them dependent on government handouts making those who do work pay for it. So again, who is the forgiveness of student loans really helping? Just look thu the smokescreen. The truth will always be the truth. No matter what is spun against it.