Biden Administration Forgives $10,000 of Student Loan Debt Per Borrower
Source：New York Times
From：Taiwan Trade Center, Chicago
Update Time：2022/09/08
Biden Cancels Student Loan Debt
Biden Announced in late August 2022 that his administration’s plans to forgive 10,000 of student loan debt per-borrower. The stipulations around this debt forgiveness fall solely on income. If an individual makes over 125k per year or has a household income above 200k they will not qualify for this loan forgiveness plan.
The administration has done so periportally to decrease the monthly burden of payments when loan payment plans start again later this year. Conservative economists have attacked the plan, claiming it would stoke higher inflation and burden taxpayers with hundreds of billions of dollars in new debt. Some liberal economists have defended it as a lifeline for graduates who have been harmed by the soaring costs of higher education.
The US has never attempted debt forgiveness at this scale, the following years will determine which side is right. In fact, how much this plan will cost is still up for debate. Outside groups have tried to estimate the total cost. The Committee for a Reasonable Federal Budget calculates the budget impact at somewhere between $440 billion and $600 billion over a decade.
The White House will not complete an official estimate of the plan’s costs until winter at the earliest, according to the White House Budget Office, officials say those outside estimates are far too high.
“It is paid for and far more by the amount of deficit reduction that we’re already on track for this year,” Bharat Ramamurti, a deputy director of the National Economic Council, told reporters on Friday.
However, that’s not what the term “paid for” usually means. The budget deficit is coming down partially because of increased tax revenue, but also because the government borrowed trillions more than usual last year to pay for a $1.9 trillion stimulus package aimed at helping people, businesses and government endure the pandemic. The officials are effectively arguing that they are paying for student loan relief in part by not borrowing more money for pandemic aid.
Source: https://www.nytimes.com/2022/08/30/business/economy/biden-student-loans-economists.html