Biden's student loan debt 'forgiveness' plan could add up to $750 billion to national deficit: Report



The Biden administration's latest plan to wipe out federal student loan debt for millions of borrowers could add up to $750 billion to the national deficit, according to a Tuesday report from the Committee for a Responsible Federal Budget.

So far, the White House has announced $150 billion in so-called student loan "forgiveness" programs over the last year following the Supreme Court's June decision to reject unilateral loan cancellations. The previously rejected program would have wiped out $430 billion in borrower debt.

Since then, the Biden administration has ignored the court's ruling and enacted numerous similar but smaller programs to zero out federal student loan debt. Many of the cancellation announcements were rolled out through the White House's newest income-driven repayment program, Saving on a Valuable Education Plan, which sets monthly repayment amounts based on borrowers' incomes. According to the administration, roughly 8 million Americans are currently enrolled in SAVE. Over half of enrollees have a monthly payment of $0, and more than one million others pay less than $100 per month.

The Education Data Initiative reported an outstanding federal student loan debt balance of $1.602 trillion with 43.2 million borrowers. Federal loans account for 92.8% of all student loan debt, it noted.

The CRFB's report read, "Elements of the plan in today's proposed rule would cost nearly $150 billion, according to the Department of Education. However, this excludes a proposal to allow the Secretary of Education to cancel debt for those facing hardship or likely to default. Including this provision, we estimate the plan could cost $250 billion to $750 billion, depending on how the additional cancellation is designed."

The Biden administration's new plan would cancel accumulated interest for student loan borrowers with balances higher than the amount they initially borrowed. To cover these expenses, taxpayers would need to shell out $73 billion, CRFB estimated.

Borrowers in standard repayment who are eligible for cancellation but did not apply for the administration's program will also have their debt automatically wiped out. The nonprofit organization stated that would total another $9 billion.

Additionally, under the administration's plan, loans that have been in repayment for more than 20 to 25 years will be zeroed out, costing taxpayers $14 billion.

Borrowers who took out loans to participate in "low-financial-value programs" will see their outstanding account balances drop to zero. The CRFB estimates that it will cost $35 billion.

The administration will cancel debt from Federal Family Education Loans, costing another $17 billion.

Individuals "facing hardships" or likely to go into default will also be relieved of their debt. The CRFB estimated that this could cost anywhere from $100 billion to $600 billion.

"The Department of Education has estimated the first four components of the plan would cost $147 billion over a decade, with half the cost stemming from the cancellation of accumulated interest," the report stated.

The CRFB noted that the cancellation for hardships is "by far the most unclear and potentially the most costly part" of the administration's proposal, noting that it "could be both wide-ranging and ongoing."

The Biden administration has not clearly defined what constitutes an eligible hardship but mentions more than a dozen possible criteria, including household income, assets, total debt, current repayment status, age, disability, and health care expenses.

"In total, our $250 billion to $750 billion estimate for the total cost of the plan would be in line with the cost of the Administration's $400 billion blanket debt cancellation, which was ruled illegal by the Supreme Court. It would be on top of more than $600 billion of debt cancellation already enacted through unilateral executive action," the report read.

The CRFB warned that the sweeping debt cancellations would "put upward pressure on inflation and interest rates by supporting stronger demand."

Eighteen states filed two separate lawsuits against the Biden administration over its SAVE plan.

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Biden’s student loan debt ‘forgiveness’ plan faces another lawsuit: ‘Embarrassing attempt to buy the 2024 election’



Seven more states filed another lawsuit on Tuesday againt the Biden administration over its continued attempts to circumvent the Supreme Court’s ruling against sweeping federal student loan debt handouts, Fox Business reported.

So far, 18 states have sued Biden for passing billions of dollars in student loan debt on to taxpayers.

The latest lawsuit, led by Missouri Attorney General Andrew Bailey, claims that Biden’s Saving on a Valuable Education Plan, also referred to as SAVE, is illegal.

According to the administration, SAVE is a new income-driven repayment plan that uses borrowers’ income to calculate a monthly payment. The program has “unique benefits that will lower payments for many borrowers.”

The White House has used the plan to roll out so-called debt cancellation for roughly 1 million Americans with at least $45.6 billion of debt.

The Supreme Court previously rejected the Biden administration’s plan to enact unilateral debt cancellations. The federal government has since announced many smaller, similar programs despite the court's decision.

The Biden administration reported that nearly 8 million borrowers are enrolled in the president’s SAVE plan, and 4.5 million now “have a monthly payment of $0.”

AG Bailey told Fox Business, “With the stroke of his pen, Joe Biden is attempting to saddle working Missourians with a half-trillion dollars in debt. The United States Constitution makes clear that the president lacks the authority to unilaterally ‘cancel’ student loan debt for millions of Americans without express permission from Congress.”

“The president does not get to thwart the Constitution when it suits his political agenda,” he continued. “I’m filing suit to halt his embarrassing attempt to buy the 2024 election in direct violation of the law. The Constitution will continue to mean something as long as I’m attorney general.”

“We beat his unlawful student loan plan in court last summer, so he quickly rolled out Plan B. Now that we’re challenging that, he’s panicked and is rolling out a Plan C. We will continue to watch him closely and take action whenever he’s overstepped his authority,” Bailey told Fox Business.

Arkansas, Florida, Georgia, North Dakota, Ohio, and Oklahoma joined Missouri in the newest lawsuit.

The complaint argued that the SAVE plan demonstrates “a long but troubling pattern of the President relying on innocuous language from decades-old statutes to impose drastic, costly policy changes on the American people without their consent.”

Arkansas Attorney General Tim Griffin told the news outlet, “President Biden has already lost on this question once, and he is refusing to follow the law. The Supreme Court could not have been clearer: President Biden cannot unilaterally cancel student debt and force taxpayers to bear the multibillion-dollar cost.”

Late last month, Kansas Attorney General Kris Kobach and 10 other states filed a similar lawsuit against the Biden administration, challenging its efforts to wipe out federal student loan debt, Blaze News previously reported.

“Not since the Civil War has a president told the Supreme Court, ‘Yeah you blocked me, but I’m gonna do it anyway,’” Kobach told Fox News Digital. “Biden is trying to twist federal law once again, and his new plan is just as illegal as the old plan.”

The Education Department responded to the initial lawsuit, telling the news outlet, “The Department does not comment on pending litigation. However, Congress gave the U.S. Department of Education the authority to define the terms of income-driven repayment plans in 1993, and the SAVE plan is the fourth time the Department has used that authority.”

“The Biden-Harris Administration won’t stop fighting to provide support and relief to borrowers across the country – no matter how many times Republican elected officials try to stop us,” the department added.

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‘Just as illegal as the old plan’: Biden hit with lawsuit over latest student loan debt ‘forgiveness’ program



Eleven states, led by Kansas Attorney General Kris Kobach (R), filed a lawsuit on Thursday against the Biden administration after the White House announced last week yet another round of federal student loan debt “forgiveness,” Fox Business reported.

The lawsuit reads, “A coalition of States sues Defendant Biden, as well as co-defendants the Department of Education and Secretary of Education Miguel Cardona, to stop a second attempt to avoid Congress and pass an illegal student debt forgiveness. Last time Defendants tried this the Supreme Court said that this action was illegal. Nothing since then has changed.”

Since the Supreme Court’s June decision to strike down the Biden administration’s plan to enact sweeping, unilateral debt cancellations, the White House has ultimately ignored the court’s ruling and unveiled numerous smaller programs that meet the same ends. Biden’s original failed cancellation program would have eliminated $10,000 of federal student loan debt for borrowers earning less than $125,000 per year and married couples earning less than $250,000 per year. If the program had been allowed to move forward, the administration would have laid approximately $430 billion of unpaid student loan debt at the feet of American taxpayers.

The Biden administration has bragged about his new plan to cancel debt for 4 million Americans totaling at least $143.6 billion.

“In the wake of the Supreme Court’s decision on my Administration’s original student debt relief plan, we are continuing to pursue an alternative path to deliver student debt relief to as many borrowers as possible as quickly as possible,” Biden stated.

Last week, the White House announced that student loan borrowers working in the public service sector, including teachers, nurses, and firefighters, will see $6 billion of student loan debt canceled.

Kansas AG Kobach, along with Alabama, Alaska, Idaho, Iowa, Louisiana, Montana, Nebraska, South Carolina, Texas, and Utah, sued Biden for rolling out the so-called debt forgiveness programs.

Kobach told Fox News Digital, “Not since the Civil War has a president told the Supreme Court, ‘Yeah you blocked me, but I’m gonna do it anyway.’”

“Biden is trying to twist federal law once again, and his new plan is just as illegal as the old plan,” he declared.

Missouri Attorney General Andrew Bailey said that the state also intends to sue the administration for the debt cancellations, noting that Arkansas would join as well.

“Between our two coalitions of states, we will get this matter in front of a judge even more quickly to deliver a win for the American people. The Supreme Court sided with Missouri on this matter the first time. I look forward to bringing home yet another win for the Constitution and the rule of law,” Bailey stated.

The White House did not respond to Fox Business' request for comment.

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Mike Rowe decries the Biden admin's federal student loan debt cancellation policy, calling it 'the biggest pre-Labor Day slap in the face to working people I've ever seen'



Mike Rowe of "Dirty Jobs" fame issued a scathing rebuke of the Biden administration's plan to cancel massive amounts of federal student loan debt.

The move would offer $10,000 of federal student loan debt cancellation to individuals earning under $125,000 per year, while people who received Pell Grants could get $20,000 of debt wiped out — married couples would be eligible for the debt cancellation if they earn less than $250,000 yearly.

The policy provides no benefit to individuals who have already paid off their federal student loans and no benefit for people who never took out any student loans.

\u201cIn keeping with my campaign promise, my Administration is announcing a plan to give working and middle class families breathing room as they prepare to resume federal student loan payments in January 2023.\n\nI'll have more details this afternoon.\u201d
— President Biden (@President Biden) 1661355129

Rowe expressed his "disdain" for the policy.

"This decision is without question, the biggest pre-Labor Day slap in the face to working people I've ever seen," he declared in a Facebook post.

"I work hard on this page, (not as hard as I could, perhaps, but pretty hard), to avoid the politics of the moment, and comment only on topics that impact the foundation I'm proud to run – a foundation that awards work-ethic scholarships to individuals who choose to forego an expensive, four-year education in favor of a skilled trade. When I do weigh in, I try to acknowledge both sides of the argument, and make my points with as much respect as I can muster. Today, however, I can see only one side. Today, I can find nothing to respect in the President's decision to transfer billions of dollars in outstanding student loans onto the backs of those people my foundation tries to assist - the same people I've spent the last twenty years profiling on Dirty Jobs," he wrote.

Rowe posted the text of a piece written by National Review's Charles C. W. Cooke, noting that Cooke "writes better than I do, and shares my disdain for what just happened."

In the piece titled "Biden’s Student-Debt Bonfire Is a Classist Message to the Uncredentialed: Screw 'Em," Cooke contended that Democrats view those who attend college as superior to those who do not.

"Why does Biden not want to do the same thing for loans on trucks owned by plumbers? Why not for mortgages ... Why not for credit cards or auto payments or mom-and-pop credit lines?" Cooke wrote, according to Rowe's post. "The answer, I’m afraid to say, is disgustingly classist: Because Joe Biden and his party believe that college students are better than everyone else. Because Joe Biden and his party believe that college students are of a finer cut. Because Joe Biden and his party prefer college students to you, and they think that those students ought to be rewarded for that by being handed enormous gobs of your money."

Kassy Dillon worked to pay off her own student loans but gets slammed as 'selfish' for saying she'll be angry if Biden forgives student debt



Kassy Dillon faced significant backlash on Twitter for saying that she worked diligently to pay off her own student loans and would be incensed if President Joe Biden forgave student debt.

"I just worked my butt off to pay off my very expensive student loans a few months ago. If Biden forgives student loans, I’m going to be livid," Dillon tweeted on Wednesday, expressing a sentiment likely shared by scads of other people.

But the straightforward and reasonable comment was met by a wave of criticism, including from celebrity Valerie Bertinelli who accused Dillon of being selfish.

"Tell me you’re selfish without telling me you’re selfish," Bertinelli tweeted in response to Dillon's post.

Tell me you\u2019re selfish without telling me you\u2019re selfishhttps://twitter.com/KassyDillon/status/1519311834611949568\u00a0\u2026
— \ud83d\udd4a\ud83c\uddfa\ud83c\udde6 Valerie Bertinelli (@\ud83d\udd4a\ud83c\uddfa\ud83c\udde6 Valerie Bertinelli) 1651091531

"This isn’t about selfishness it’s about responsibility. Forgiving student loans won’t fix the problem of schools hiking tuition costs," Dillon replied.

"Exactly Kassy focus on the actual problem," Bertinelli tweeted.

In response to Bettinelli's post accusing Dillon of selfishness, another Twitter user suggested that Bertinelli spend some of her own money to pay off people's student debts.

"Selfish for paying off one’s own loans, and not wanting taxpayers to cover the dumb decisions of others? You’ve got money, Val. Why don’t you help them pay those degrees off?" the person tweeted.

Bertinelli replied, "I’ll never be wealthy enough to not pay taxes. So, you see, dear, I am one of those 'taxpayers covering the dumb decisions of others'. I have an idea tho, how about we get tax dodgers (*coughmultibillionaires) to actually pay their fair share."

In a tweet responding to comments made by Ian Haworth, Bertinelli noted, "Dude, I don’t even have a dog in this fight, I never graduated high school. Forgiving debt that never should’ve been incurred by greedy colleges ... and changing the system should be a no-brainer."

Dude, I don\u2019t even have a dog in this fight, I never graduated high school. Forgiving debt that never should\u2019ve been incurred by greedy colleges (they have no problem paying football coaches ) and changing the system should be a no-brainer.https://twitter.com/ighaworth/status/1519415574325075969\u00a0\u2026
— \ud83d\udd4a\ud83c\uddfa\ud83c\udde6 Valerie Bertinelli (@\ud83d\udd4a\ud83c\uddfa\ud83c\udde6 Valerie Bertinelli) 1651092576

Others also criticized Dillon for feeling outraged over the prospect of the government forgiving student debt.

"The lesson of this @kassydillon person's tweet is that only SHE, and no one else, matters - yet she asks us to set aside OUR own interests and worry about her becoming livid #LividForKassy #OnlyKassyMatters #ThinkOfKassy #WontSomebodyThinkAboutKassy," Keith Olbermann tweeted.

Someone else drew the following bizarre analogy: "Here's what you sound like: My mom died from Alzheimer's disease a few years ago. If they find a cure now, I'm going to be livid. You are an idiot in my opinion. You want people to remain drowning in debt because you're a fragile little snowflake that will melt in the sun."

"Imagine thinking someone getting Alzheimer's is the same as willingly taking on a loan that you agreed to pay back," Dillon responded.

Another individual likened Dillon's position to someone who opposes Polio vaccinations because they were crippled by Polio during their own childhood: "'I was crippled by polio as a child so why the hell should you get vaccinated???'"

"Student loan forgiveness isn't a vaccine to a disease. It's enabling the universities that are overcharging because they know they'll get government help. These people willingly took on these student loans, no one willingly takes on polio. This is a ridiculous analogy," Dillon noted.

President Biden said on Thursday that he is "considering dealing with some debt reduction."

Pres. Biden on student loan forgiveness: "I am not considering $50,000 debt reduction but I am in the process of taking a hard look" at some student debt forgiveness. \n\nHe adds he'll have an answer "in the next coming weeks."pic.twitter.com/R78gMrWy8Q
— CBS News (@CBS News) 1651165155

Biden administration fully cancels some student loan debt after reversing Trump-era policy



The Department of Education took new steps last week to provide certain federal student loan borrowers complete debt relief.

The announcement came as Democrats explore how to cancel student debt. More than 40 million Americans have federal student loan debt totaling more than $1.7 trillion. Debt payments are currently suspended due to financial hardship caused by the coronavirus pandemic.

What is the DoE's plan?

Perhaps preparing to take even larger steps in the near future, the Education Department said student loan borrowers can apply for full debt cancellation if their college engaged in fraud or other financial misconduct.

The government estimates that $1 billion in student loans will receive "cancellation" as a result, which will benefit 72,000 borrowers.

"Borrowers deserve a simplified and fair path to relief when they have been harmed by their institution's misconduct," Education Secretary Miguel Cardona said. "A close review of these claims and the associated evidence showed these borrowers have been harmed and we will grant them a fresh start from their debt."

More from the Department of Education:

Current provisions in federal law called "borrower defense to repayment" or "borrower defense" allow federal borrowers to seek cancellation of their William D. Ford Direct Loan (Direct Loan) Program loans if their institution engaged in certain misconduct. Beginning today, the Department will ensure that borrowers with approved borrower defense claims to date will have a streamlined path to receiving full loan discharges. This includes borrowers with previously approved claims that received less than a full loan discharge.

The new guidance defines "full relief" as cancellation of 100% of the borrower's debt, "reimbursement of any amounts paid on the loans, where appropriate under the regulations," "requests to credit bureaus to remove any related negative credit reporting," and "reinstatement of federal student aid eligibility."

What is the background?

According to the Washington Post, the new policy reverses one implemented under former Education Secretary Betsy DeVos, and revives another implemented during the Obama administration.

Students are entitled to a discharge of their debt when their college uses illegal and deceptive tactics to persuade them to borrow, but the Trump administration tried to limit that relief. DeVos created a methodology for processing claims that compared median earnings of graduates who have made debt relief claims with those of graduates from comparable programs. The bigger the difference, the more relief an applicant will receive.

Critics of the policy said graduate earnings were a faulty measure as many applicants never completed their degree and the formula created impossible standards for many to get full relief. The policy was a stark contrast from the Obama administration's practice of granting full cancellation when it determined a college committed fraud.

About 200,000 student loan borrowers have filed for relief under the "borrower defense to repayment" statue, the Post reported. The Department of Education is working to find a solution for those borrowers whose debt will not be cancelled under the new guidelines.