I wrote yesterday on Biden’s new student debt forgiveness thing…..I also added that I have some reservations about his plan.
Today I would like to post on the reservations others have with the Biden plan….
I will begin with a blogging friend over at “Constitutional Insurgent”…..and his objections….
We both have some reservations but we come at them from different directions…..and we are not alone…..
President Biden rolled out his long-awaited plan for federal student loan debt forgiveness on Wednesday—but while it will erase student debt for an estimated 20 million Americans and reduce it for many millions more, the list of people criticizing the plan is a long one, including those who say there should be no loan forgiveness, those who say the plan doesn’t go far enough, and those who complain it does nothing to fix the problem or soaring education costs. Biden’s plan, which fulfils a campaign promise, forgives up to $10,000 in student debt for those making under $125,000 a year. Eligible Pell Grant recipients can have an additional $10,000 in debt erased. Some reactions:
“A regrissive, expensive, mistake.” The Washington Post editorial board calls the debt forgiveness—and the extension of a pause in payments—”ill-conceived and misdirected.” “Widely canceling student loan debt is regressive,” the board says. “It takes money from the broader tax base, mostly made up of workers who did not go to college, to subsidize the education debt of people with valuable degrees.” With the cost of canceling debt estimated at $230 billion, the plan is “also expensive—and likely inflationary,” the board writes.
- “Economically responsible.” White House press secretary Karine Jean-Pierre said Wednesday that the measures are “not only economically responsible, they will provide real benefits to families.” Jason Furman, former President Obama’s onetime top economic adviser, strongly disagreed, saying “pouring roughly half trillion dollars of gasoline on the inflationary fire that is already burning is reckless,” Fox reports.
- “Like pouring a bucket of ice water on a forest fire.” Derrick Johnson, president and CEO of the NAACP, says ” Black Americans have been disproportionately devastated by student loan debt,” leaving them unable to buy homes and build intergenerational wealth. Canceling a minimum of $50,000 per borrower would “drastically reduce the racial wealth gap,” but “canceling just $10,000 in debt would be bad public policy and a devastating political mistake,” he writes at CNN.
- A “slap in the face to people like me.” Bethany Mandel at Fox says she dropped out of Northeastern before taking a single class when she realized what her debt repayments would be. She says she went to public schools instead, kept her debt to a minimum, and lived frugally after graduation to repay her debt as quickly as possible. Biden’s plan is “a slap in the face to people like me, people who sacrificed dream schools and picturesque college experiences in order to responsibly take out as little debt as possible and pay it down according to the terms we agreed upon,” she writes.
- Older borrowers “neglected.” Alexis Leonidis at Bloomberg argues that the plan doesn’t do enough for “older Americans whose financial lives are overwhelmed by student debt with little chance of ever being able to repay.” Many of the 2.5 million borrowers over 62 have debts well over $10,000 and default rates are “dismal,” she notes. She says the administration should “cancel all student debt for those who been in income-based repayment for more than 20 years, and end the practice of dipping into Social Security benefits for those who default.”
- A different way. Oren Cass at Politico argues that Biden’s plan does nothing to fix America’s “dysfunctional system for financing higher education.” He says the problem stems from cultural beliefs that have made it an “implicit parental obligation” and “an explicit public obligation, to facilitate any student attending any school, regardless of cost,” despite the questionable value of many degrees. Cass argues that student debt should be treated like other kinds of debt, allowing borrowers to declare bankruptcy. He says public university systems should be well-funded—and for those who seek loans for more expensive private options, the lenders should be the colleges themselves.
There you have the objections….
If you have any thoughts please join the conversation.
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