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Biden’s student loan bailout plan: $475B over next decade.

(Photo​ by ANDREW⁣ CABALLERO-REYNOLDS/AFP ⁢via ⁢Getty⁢ Images)

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OAN’s Brooke Mallory

5:30⁢ PM ⁣–⁢ Monday, ⁤July 17, ⁣2023

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According‍ to the ⁣Penn⁢ Wharton‌ Budget‌ Model, President Joe Biden’s new‌ income-driven⁢ repayment ⁣plan‌ for ‌student loans will cost $475 ⁤billion⁢ over the next‍ ten years,‌ which is⁤ tens of ⁤billions‌ more ‌than‌ a ⁢previous⁤ proposal that the ⁢Supreme​ Court rejected⁢ last‌ month.

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According to the‌ Penn model, taxpayers ⁢will incur $200⁣ billion in ⁣expenditures ⁤as a⁢ result⁤ of ‌payment​ cutbacks ‍under the president’s⁣ “Saving on ⁤A‌ Valuable ⁤Education”⁤ (SAVE) plan since ‍over‍ half of ⁤the⁤ $1.64 trillion in outstanding loans would⁣ be‍ paid.

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Payment‍ reductions under ‌the⁣ plan⁤ for $1.03 trillion⁢ in ⁣new student ‌loans over ​the⁤ next decade ⁣will ⁣cost taxpayers an additional⁣ $275 billion.

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According ⁤to the model’s​ estimate range, the⁤ cost ‍of ⁢the‍ Income-Driven‍ Repayment ‌(IDR) ⁣plan could ⁣be‌ as low as ‌$390.9​ billion ⁢or⁣ soar⁢ as high as $558.8⁢ billion.

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“Due to the increased generosity of​ the newly ​proposed⁤ IDR⁤ plan, future student⁣ borrowers have‍ the⁢ incentive ⁣to ⁤increase ​their ⁤federal student ​loan borrowing,”‌ said Penn Wharton ‌junior​ economist Penlei ‌Chen.

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The ⁢president’s SAVE proposal is reportedly set to go‍ into​ effect ⁢on July ⁢1st, 2024, and ⁤would⁣ purportedly ​reduce ‍monthly ​income-based student loan⁣ payments ⁤in half, eliminate monthly payments ⁤for ⁢minimum-wage ⁣earners,‌ and erase‌ all ​outstanding ‌debt ⁣after ​ten‍ years of payments for⁣ student borrowers who⁤ borrowed ​less⁢ than $12,000.

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According to ​the⁣ Biden​ administration, most ​community college⁢ students would⁣ not‍ have to repay ⁣any debt under ⁣the⁢ plan.

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“Make ‍no mistake, Biden’s newest student​ loan ⁢scheme only ⁢transfers the burden​ from those⁣ who willingly⁤ took out loans to⁢ Americans who⁢ never​ attended‌ college‌ or⁤ who ​already ⁢fulfilled their commitment⁢ to‌ pay⁣ off⁢ their loans,”⁢ said⁤ Sen.⁢ Bill ⁣Cassidy ‍(R-La.), who chairs⁤ the Senate ‌Health, Education,⁤ Labor, and⁣ Pensions Committee, calling the ‍repayment⁢ “irresponsible” and‍ “unfair.”

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The ⁢senator’s ⁤office ⁢stated ⁤that ‍households earning ‍more​ than​ $250,000 per year​ may be‍ eligible ⁢for “some”‌ government help ⁤if they ⁢file their ‌taxes ⁣separately. ⁤They⁣ also ⁤cited a March⁣ Congressional ⁢Budget‍ Office​ assessment‍ that⁣ understated⁤ Biden’s ⁢loan‍ plan, putting ‌the‌ public cost previously at⁤ $276 billion.

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Education⁤ Secretary ⁢Miguel ⁣Cardona also⁤ stated ⁤on Friday that his agency will⁣ erase ⁢$39 billion in federal ⁤student ⁤loans ‌for‌ 804,000⁤ students who had‍ been paying them ⁣for 20 to ⁢25 ​years, depending⁣ on⁣ when ⁢they⁤ began the ‌repayment ⁣process.

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The ⁤Supreme Court ‍ruled ⁢6-3 on‌ June 30th that it was‍ unlawful to write off the​ debt⁣ without legislative consent, overturning Biden’s plan⁤ to erase⁤ up to⁣ $430 billion⁣ in‌ loans‍ for up ⁣to 43 ⁤million ⁤borrowers.

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That plan ⁣relied on ⁣a 2003 statute ⁣intended ⁢to⁤ waive ​loans for veterans⁤ of the ⁢Iraq and​ Afghanistan ‍conflicts, claiming⁢ that the ⁢financial hardship‌ caused by ⁣the COVID-19⁣ era constituted a similar ‍national emergency.

Many Americans have ​voiced ​their frustrations with ⁣Biden ​and his‌ administration’s⁤ consistent efforts⁢ to shift the financial ⁢burdens ‍of ⁤those‍ who freely⁤ chose⁤ to‍ take ⁤out loans and attend​ university to ​taxpayers‌ who chose to go‌ to‍ trade⁢ school or⁣ who ⁣were⁣ unable ⁣to attend ⁤college due to⁣ financial constraints.

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