Biden set to cancel up to $10K in student debt despite warnings

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Rear view of group of university graduates in black gowns lines up for degree in university graduation ceremony. Concept education congratulation, student, successful to study.

President Biden is expected to announce a plan Wednesday to cancel thousands of dollars in federal student loan debt for borrowers who make less than $125,000 per year — despite one think tank warning it could cost the average taxpayer more than $2,000.

CNN, citing multiple sources familiar with the discussions, first reported late Monday that the president would announce the write-off of up to $10,000 per borrower after he returns to Washington from his Delaware beach house.

The Associated Press reported Tuesday evening that Biden will also announce an extension of the current loan payment moratorium until January, after the midterm elections.

“The rich rules over the poor,
And the borrower is servant to the lender.” Proverbs 22:7

U.S. President Joe Biden speaks during a bill signing ceremony where the president is signing "The Inflation Reduction Act of 2022" into law in the State Dining Room of the White House in Washington, U.S. August 16, 2022.

Republicans accused the Biden administration of trying to buy the votes of young, college-educated Americans from wealthy families in November.

“Most Americans do things the right way. You pay your debts,” tweeted Rep. Nancy Mace (R-SC). “Instead, our Administration wants to redistribute billions in student loan debt to our taxpayers.”

“My neighbor, a detective, worked 3 jobs (including selling carpet) & his wife worked to make sure their daughter got quality college degree w/no student debt,” tweeted Rep. Kevin Brady (R-Texas) the top GOPer on the House Ways and Means Committee. “Big sacrifice. Now their taxes must pay off someone else’s student debt?”

An analysis by the Penn Wharton Budget Model backed up that claim, estimating that the cancellation would cost the federal government $329.7 billion over the next 10 years — with up to 73% of the cancellations assisting households in the top 60% of earners in the US.

Based on that analysis, the National Taxpayers Union Foundation worked out the average cost of Biden’s announcement to $2,085.59 per taxpayer.

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