WASHINGTON, DC, Dec 5 — The late Senator Everett McKinley Dirksen [R-IL] is said to have balked about excessive federal spending in 1962, cautioning his colleagues that, “A billion here, a billion there, and pretty soon you’re talking real money.” Maybe it is too far in the past for President Biden to recall that message because here Biden is continuing to spend not a billion dollars, but hundreds of billions of dollars of taxpayer money to extend his federal student loan moratorium.
The president promised to end the moratorium last February but Mr. Biden reinstated it last August, promising that payments would be resumed no later than December 31, 2022. Instead, he has extended the pause yet again until June when, according to CNBC, he intends to move forward with a debt forgiveness plan. The cost to taxpayers to date for his largesse is now more than $150,000,000,000 and growing at an alarming rate.
However, The Hill reports that over the past several weeks the St. Louis U.S. Court of Appeals put a halt to the president’s plans, the Court of Appeals in New Orleans refused to revive the program and the U.S. Supreme Court has agreed to hear arguments on the issue but not until February.
Newsweek says that the Biden plan is to forgive some $20,000 for Pell Grant debtors and as much as $10,000 for other student borrowers and that some 95% of borrowers would be eligible for debt relief and that as many as 45% would have their debt completely eliminated.
The Committee for a Responsible Federal Budget [CRFB], a non-profit public policy organization based in Washington, D.C., suggests that college graduates with generous incomes may benefit big-time as a result of Biden’s generosity. In a new report published on November 22, CRFB states: “As we’ve shown before, the benefit of the pause accrues disproportionately to those with advanced degrees. Should the President extend the policy through the end of 2024, the nearly five-year long pause would mean that a typical medical student who graduated in 2019 would effectively have $107,000 forgiven and a law school graduate would have $65,000 forgiven. That’s compared to the average borrower receiving $11,000 of forgiveness. Between 75 to 80 percent of the forgiveness would be from the pause itself and the rest from the effects of higher inflation on eroding debt. New doctors receive almost ten times the benefit of the average borrower and $107,000 more than someone who never attended college.”
There’s a consensus out there that a student loan payback freeze is not just unfair, that it is bound to fuel a spike in inflation going forward, according to CRFB Senior VP Marc Goldwein. In addition, he told the Daily Caller, that by continuously extending the repayment pause student borrowers will start to think that they might never have to make payments. “The longer this goes, I think the more people are gonna start to question whether they’re ever going to pay back their debt. At some point, it’s probably going to cause people, if it isn’t already, to take out more debt than they otherwise would in hopes that at least they’ll get some of the interest canceled.”
Last August the White House issued a Fact Sheet regarding “Student Loan Relief for Borrowers Who Need It Most…working families…low- and middle-income families.” However, the Student Loan Planner website says President Biden’s “$10,000 in federal student loan debt forgiveness with income limits of $125,000 for individuals or $250,000 for households/families to qualify for forgiveness.” That’s “Forgiveness” with a capital “F.” In its November 15 post the Planner website noted that “Top White House officials have repeatedly confirmed that a decision on student loan cancellation would be made before the ongoing student loan payment pause ends. Biden himself has indicated that he could decide within a matter of weeks.” Talk about upping the ante.
You may recall that the president declared definitively last august when he last extended the moratorium that, in no uncertain words, “The student loan payment pause is gonna end. It is gonna end – I am extending it to Dec. 31, 2022. And it is gonna end at that time. It is time for the payments to resume.”