Poll: 1/3 of student debt holders used “extra money” they believed would be forgiven.

Roughly a Third of Americans Spent Money Assumed to be Forgiven Under Biden’s Student Loan Forgiveness Plan

According to a new poll by Intelligent.com, approximately one-third of Americans with student loans spent money they wouldn’t have normally spent because they were confident it would be forgiven under President Joe Biden’s student loan forgiveness plan.

“The Supreme Court decision is a cold shower for those who had their hopes pinned on a $10,000 relief,” said James Allen, founder of personal finance website Bullpin.com. “It’s like waiting for a tax refund only to find out the IRS made a mistake.”

The poll surveyed 977 people who would have qualified for at least $10,000 of debt relief under Biden’s plan, which was recently struck down by the Supreme Court. Of those surveyed, one in three admitted to spending “extra money” because they assumed their debt would be forgiven. Shockingly, some even used that money for vacations, retail items, and vices like alcohol, drugs, and gambling.

Spending Habits and Amounts

• 31% spent between $2,501-5,000
• 27% spent between $1,000-2,500
• 17% spent between $5,001-$7,500
• 9% spent between $7,501-$10,000
• 5% spent more than $10,000
• 11% spent less than $1,000

When it comes to what they spent the money on, the majority (44%) used it for retail items, while 37% used it to pay off other debts. Other expenses included home and auto payments, childcare, and down payments on vehicles and homes.

Surprisingly, 20% of respondents admitted to spending the “extra money” on vacations, 8% used it for alcohol or drugs, and 7% used it for gambling.

Concerns and Refusal to Pay

Over half of borrowers now feel unprepared for the resumption of student loan repayment in October. 35% say they are “very unprepared,” and 23% say they are “somewhat unprepared.” Additionally, more than a quarter of respondents claimed they might refuse to pay the $10,000 that would have been forgiven under the president’s plan.

The Supreme Court Decision

Late last month, the Supreme Court struck down Biden’s loan forgiveness plan in a 6-3 decision. The court stated that the plan exceeded the Secretary’s authority and could not rewrite existing statutes.

According to a White House fact sheet, 26 million Americans had applied or were eligible for the debt relief, which targeted individuals making less than $125,000 or couples making less than $250,000. The plan would have forgiven up to $20,000 for those who received Pell Grants. The Congressional Budget Office estimated the plan’s cost to be around $400 billion.

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