Biden’s Debt Forgiveness Plan Burdens US Taxpayers

On June 30, the US Supreme Court struck down the Biden Administration’s hard-fought attempt to erase up to $20,000 in student loan debt for 43 million borrowers.

But the battle wasn’t over…

Immediately following the Court’s decision, the angered President vowed to find another route: “Today’s decision has closed one path. Now we’re going to pursue another.”

As a workaround, Biden tapped into the authority of the Department of Education. And just two weeks after the Administration’s first plan was blocked, the US Education Department announced it would erase more than 800,000 student loans.

This means $39 billion in debt will simply be “wiped away” for people who have been making payments for 20 years or more.

Education Secretary Miguel Cardona was overjoyed and said, “For far too long, borrowers fell through the cracks of a broken system that failed to keep accurate track of their progress towards forgiveness…”

And “By fixing past administrative failures, we are ensuring everyone gets the forgiveness they deserve.”

But not everyone agrees with the plan…

Republican Senator Eric Schmitt of Missouri protested the move: 

“This action continues this Administration’s march to ignore Congress and enact economy-wide change by fiat.”

He added, “The ink was not even dry on the Court’s decision, yet it appears that this Administration intends to surrender to the far-left fringes of the Democratic Party and use Section 432(a) of the Higher Education Act to enact a new debt cancellation plan.”

Whether this latest federal attempt to erase outstanding debt can stand up to potential legal challenges is still unknown. 

However, one thing is clear:

This administration is moving forward anyway

On July 25, Biden’s team announced they would forgive another $130 million in student loans for those who attended Colorado’s CollegeAmerica.

This will affect 7,400 borrowers who Biden says were “lied to, ripped off and saddled with mountains of debt.” And students who attended other schools, including Corinthian Colleges and DeVry University, will also get a student loan bailout.

The White House has also approved $14.7 billion in debt relief for borrowers “whose colleges took advantage of them or closed abruptly.”

Biden says his Administration has approved $116 billion in debt relief for 3.4 million Americans.

And they want to dismiss more loans, but it’s still “against the rules.”

However, that won’t stop the Administration, because…

When you make the rules, you can “bend” them…

On July 1, new regulations went into effect for the Public Service Loan Forgiveness (PSLF) program.

This program “can wipe out the federal student loan debt for borrowers after 10 years of employment for qualifying nonprofit and governmental organizations.”

In other words, a full decade after select students use their degrees for gainful employment, they’ll get to walk away from their debt obligation,

But the White House thinks 10 years is too long to wait.

So, they used a special temporary measure called a Limited PSLF Waiver to allow hundreds of thousands of student loans to be forgiven. Some elements of the PSLF expired last year, but others were extended to the end of this year.

The question is:

Who is paying for all this debt forgiveness?

In a letter to Education Department Secretary Cardona, Senator Schmitt answered the question loud and clear:

“I do not intend to stand idly by as this administration once again pushes an unlawful plan that will require working American taxpayers to foot the bill.”

And just how much will it cost?

According to a new report by economists at the University of Pennsylvania’s Penn Wharton Budget Model, the Administration’s plan will cost an estimated $475 billion over the next decade.

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