The true cost of Biden's student loan ploy: Models predict debt levels will return in just FOUR YEARS, it will cost each taxpayer at least $2,000, drive inflation higher and cost more than $300billion - and leaves out those who DID pay
Biden was long expected to announce plans to forgive up to $10,000 in student debt for those making up to $125,000
He did, but he threw in another provision - $20,000 of debt forgiveness for Pell Grant recipients
In addition, borrowers will not be required to pay back loans until January 2023, marking the fifth extension of the payment pause
One-time debt forgiveness of $10,000 per borrower making under $125,000 will cost about $300 billion
Cancelling $10,000 student debt without income caps would draw down the total amount of debt from $1.6 trillion to $1.2 trillion
It would take only four years for federal student loan borrowers to owe the government a total of $1.6 trillion once again
By Morgan Phillips, Politics Reporter For Dailymail.Com
Published: 13:05 EDT, 24 August 2022 | Updated: 13:45 EDT, 24 August 2022
President Biden announced his his long-awaited student loan cancelation plan and an extension of the moratorium on payments Wednesday.
Biden was long expected to announce plans to forgive up to $10,000 in student debt for those making up to $125,000, which he did, but he threw in another provision - $20,000 of debt forgiveness for Pell Grant recipients. In addition, borrowers will not be required to pay back loans until January 2023, marking the fifth extension of the payment pause.
Pell Grants are usually not repaid unless a student drops out early or does not take the proper number of credits.
Here's what the program will actually cost at minimum, based on models that did not factor in Pell Grant forgiveness:
One-time debt forgiveness of $10,000 per borrower making under $125,000 will cost about $300 billion. The cost increases to $330 billion if the program is continued over a standard 10-year budget window.
Disproportionately favors the well-off
Though the Biden administration plans to institute income caps to stave off criticisms that student loan forgiveness benefits the wealthy, between 69 and 73 percent of the debt forgiven accrues to households in the top 60 percent of the income distribution, according to a Penn Wharton analysis.
The Pell Grant provision, which forgives up to $20,000 in debt, is targeted toward lower-income borrowers who are eligible for such loans.
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https://www.dailymail.co.uk/news/article-11142029/REALITIES-Bidens-student-loan-ploy-Models-predict-debt-levels-return-just-FOUR-YEARS.html
