Details Are in on Biden’s Debt Relief Plan, but Pelosi’s Prior Words Torpedo It Big Time – Opinion

Joe Biden, as we reported, is ready to forgive incredible amounts of student debt.

Some details now are available about what he plans to do.

According to Bloomberg News’ Jennifer JacobsBiden will announce that he has extended the four-month moratorium on repayment of loan debt until Dec. 31, 2008. Biden will support this extension. Biden will forgive $10,000 debt from borrowers earning less than $125k. Pell grant recipients can have $20k debt forgiven. The final stoppage on student loan debt repayments, which he made until Dec. 31 was intended to give time for loan processing.

Here’s how the White House fact sheet breaks it down.

Provide targeted debt relief to address the financial harms of the pandemic, fulfilling the President’s campaign commitment. Pell Grant recipients with Pell Grant loans will receive $20,000 debt cancellation. For non-Pell grant recipients, the Department of Education will offer up to $10,000 for debt cancellation. If a borrower’s income is below $125,000, or $250,000 for married couples, they are eligible for the relief. No high-income individual or high-income household – in the top 5% of incomes – will benefit from this action. In order to facilitate repayment and reduce defaults, federal student loans will remain paused until December 31, 2022. Borrowers can expect to start paying again in January 2023.

The following steps will help make student loans more affordable for future and current borrowers:
For undergraduate loans, you can cut your monthly payment in half. The Department of Education is proposing a new income-driven repayment plan that protects more low-income borrowers from making any payments and caps monthly payments for undergraduate loans at 5% of a borrower’s discretionary income—half of the rate that borrowers must pay now under most existing plans. The average student loan payment for future and current borrowers will drop by over $1,000.

To fix the Public Service Loan Forgiveness (PSLF), a new rule would allow borrowers to receive credit towards loan forgiveness for those who have previously worked as a volunteer, military member, federal, state or tribal government official. These changes will be based on the temporary adjustments that have been made by Department of Education to PSLF. More than 175,000 government employees have received more than $10 million in loan forgiveness.

Future students and taxpayers can be protected by cutting college costs and holding schools responsible for raising prices.

The President fought for the largest increase in Pell grants in more than a decade. He also facilitated one of largest one-time influxes into colleges and universities. The President is committed to reducing college costs by fighting to increase the maximum Pell Grant to $25,000 and to make community colleges free. Colleges have an obligation not to raise prices and make sure borrowers don’t take on debt that they can’t afford. Already, the Administration has taken important steps to increase accountability. This includes in areas where previous Administrations had weakened rules. The Department of Education will announce new initiatives to help student borrowers save money on college.

So just the first part of that “three-part plan” is asking the American taxpayers to foot the bill for about $300 billion dollars, according to estimates. This would be a disaster in the middle of rising Bidenflation, and even more so during a recession.

Additionally, it’s making American taxpayers cover the debts of others, with no authority. We shouldn’t have to cover debts people are legally bound to. Moreover, Biden doesn’t have the power to forgive the debt. He’s not the king and it’s not within his constitutional authority to just excuse debt.

Even House Speaker Nancy Pelosi (D-CA) acknowledged that Biden doesn’t have that power last year and that he needs Congress to do so.

“People think that the President of the United States has the power for debt forgiveness,” Pelosi declared. “He does not. He is able to delay. He can delay. However, he doesn’t have the power to delay. That has to be an act of Congress.”

Move ahead to now, and once again — with Democrats — all norms change. They declare that they are able to, regardless of whether the Constitution, because suddenly they feel they must do it for midterm votes.

Yes, that’s so transparently what this is about: buying votes. Even the extension is about buying votes — notice it’s only until December and then it’s all back in force. Once they have your vote they will be able to bring it back.

Now the problem with this is not only is it glaringly wrong, but the transparent effort to buy votes is also going to infuriate both sides of the aisle: it’s going to aggravate people on the right and those who paid their loans with how wrong it is and it’s going to still tick off the folks on the left because they’re going to think that Biden didn’t go far enough. The left is now not going to accept his excuse that he can’t forgive all the debt.

So ultimately, I don’t think it’s going to have the effect that Biden and the Democrats have hoped for because it’s going to tick off everyone.

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