Welcome to Extreme Investor Network, where we provide in-depth analysis and unique insights into the world of economics. Today, we’re going to discuss the latest controversial move by the Biden administration to forgive billions of dollars in student loan debt.
In a bid to secure the Gen Z vote, Joe Biden has announced a plan to forgive $7.4 billion worth of student loans, bringing the total amount of loan cancellations under his administration to a staggering $153 billion. This move is expected to benefit 277,000 borrowers and will cost the American public a whopping $559 billion.
The original student loan forgiveness plan implemented under the CARES Act backfired, as millions of borrowers stopped making payments in anticipation of Biden fulfilling his campaign promise to erase all student loan debt. By July 2023, over 7.5 million borrowers had defaulted on their payments, and millions more were on the brink of default when the COVID provisions were set to end in September 2023.
Amidst pushback from academics and universities, Biden has introduced the SAVE plan, which bases payments on a percentage of discretionary income. However, low-income borrowers may end up being completely relieved of their debt obligations, further adding to the national deficit and taxpayer burden.
President Biden’s assertion that this move is necessary to provide relief to millions of Americans facing overwhelming student loan debt is met with skepticism. Many argue that this blatant vote-buying tactic ignores the economic implications and the growing national debt, which poses a significant threat to national security.
While halting repayments in the midst of a global economic shutdown may have been necessary, burdening the average American taxpayer with additional obligations is seen as economic tyranny. The fact that no one is forgiving mortgage loans, a cost individuals agreed to take on, raises questions about the fairness and sustainability of Biden’s approach.
As the expected cost of student loan forgiveness continues to rise and Biden’s poll numbers decline, it remains to be seen how this move will impact the overall economic landscape. Stay tuned to Extreme Investor Network for more updates and analysis on this evolving situation.
