Biden Regime’s New Student Loan Rule Will Cost $361 Billion
According to a report by Andrew Moran of the Epoch Times, a rule recently put forward by the Department of Education could put United States taxpayers on the hook for $361 billion in the upcoming decade. Another study indicated that the wealthy are the principal beneficiaries of the Biden regime’s key student loan forgiveness plan.
According to a recent announcement from the Biden regime, over 16 million individuals were approved for the student loan forgiveness program. Since October 2022, roughly 26 million people have submitted applications for student debt relief. Should this student loan program withstand a legal challenge in the Supreme Court in February, the borrowers will be eligible for the aid.
The Biden regime’s relief program would forgive up to $10,000 for borrowers who took out federal student loans and up to $20,000 for individuals who received Pell grants. Individuals making less than $125,000 and families earning less than $250,000 would be eligible for the program. In total, 95% of all student loan borrowers would be eligible for student loan forgiveness.
“More than 40 million Americans would qualify for one-time student debt relief,” the White House posted in a tweet on January 30. “Nearly 90% of the relief going to out-of-school borrowers would go to those earning less than $75,000 a year. This relief is currently on hold because of lawsuits brought by opponents of the plan.”
This announcement came at a time when the Department of Education put forward a rule to modify one of its repayment plans by lowering borrowers’ payments to a given percentage of their discretionary income. The plan in question —REPAYE—would cut monthly costs for undergraduate borrowers by up to half. Some estimates point to the average graduate from a four-year institution saving up to $2,000 annually under this program. However, a recent study revealed that this program could come with a hefty cost over the next 10 years.
Per Penn Wharton Budget Model, an organization based out of the University of Pennsylvania’s Wharton School, this program could put taxpayers on the hook for anywhere between $333 billion and $361 billion. On the other hand, the Education Department projected that the program would cost $137.9 billion.
Curiously, Moran pointed to a University of Virginia report that revealed how the federal government’s current student loan payment moratorium has disproportionately benefited high-income earners. This study showed that the top half of earners received 70% of the benefit. Similarly, the top quintile, which comprises 16% of student loan borrowers, received 30% of the benefit
Unquestionably, student loan forgiveness is designed to serve one of the key constituencies of the Biden regime — college-education professional classes. This is a crass form of patronage politics that must be stopped. A proper national populist government would strip universities of their funding and diminish their power significantly.
Instead, there would be education liberalization, the installation of nationalist staff at traditional universities, and the promotion of trade schools as alternatives in order to clean up higher education and push for economically sustainable forms of higher education.