How do Americans really feel about student loan debt forgiveness? Students may give a sigh of relief and decide to splurge on that Friday night pizza. However, for Republican governors, it’s a different story.
On August 24, President Biden announced the One-Time Student Debt Relief Plan. Subsequently, on Sept. 12, almost half of the Republican governors signed a letter asking the president to cut the plan.
Twenty-two Republican governors are crying that American taxpayers are being forced to pay off student loans for an elite few.
Republicans contend the only people who couldn’t pay their student loans during the pandemic were doctors, lawyers, and professors.
And we know all about the big bucks professors make. Don’t get me started.
Okay, I might sound like I’m exaggerating, but it’s not by much.
According to the letter, Republicans claim that low-income American families will be forced to pay off $50,000 loans for successful doctors and lawyers. And this is just not fair!
The Republicans quote, “Simply put, your plan rewards the rich and punishes the poor.”
Correct me if I’m wrong, but are the Republicans beginning to sound like Democrats? Oh, they really do have heart. They care. Smiley emoji.
Republicans stress in the letter that the key to unlocking the American dream is hard work and personal responsibility. For many others, they chose hard work and a paycheck rather than more school and loans.
Hmm, I guess the latter gave up on the American dream.
I thought taking out a loan, studying hard to become a lawyer, scientist, doctor, or professor would give me enough money to pay off my student loans. Am I wrong?
Isn’t this the American dream that the banks have been selling us?
What makes these letter-signing Republicans think that the majority of students attending college are those who dream of becoming wealthy doctors and lawyers when they grow up?
Some of us want to be journalists, and we know how little that pays.
And what about the Covid-19 pandemic?
It wasn’t only doctors and lawyers not working during the pandemic. It was also the graduate and non-graduate working class of America who were unemployed too.
Are Republicans this out of touch with the economic demographics of the average college student? Well, it appears that they are.
The Republicans forgot to take into account that student debt forgiveness is a solution to the wages lost during the pandemic for all Americans.
The only borrowers who will be receiving student debt forgiveness are those with an individual income less than $125,000 or $250,000 per household.
Seriously, how many accomplished lawyers, and doctors have an individual income less than $125,000?
According to the US Department of Education, no borrower or household in the top 5% of earners will benefit from the action.
Personally, I don’t think the Republicans have a valid point in their squabble here.
However, don’t do the happy dance just yet.
The US Department of Education estimates that over the next ten years, the program will cost on average $30 billion annually.
Another downside to Biden’s plan is the states may tax the forgiven student. In some states, student loans are considered taxable income.
There are currently two lawsuits filed against Biden’s student debt forgiveness policy.
In one of them, Plaintiff Frank Garrison alleges he will be forced to pay state taxes on the canceled amount that he otherwise would not have to pay.
Sadly, President Biden had to scale back on his student loan forgiveness policy.
Unfortunately, students who took out loans from private companies such as Perkins, and Federal Family Education Loans (FFEL) will not obtain forgiveness.
The reason is the debt cancellation would decrease revenue from interest payments for the private banks who manage the loans.
On the upside, a statement by The Department of Education assured that it will continue to explore options in providing relief for those students who took out Perkins, and FFEL loans.
According to the Biden administration, 43 million Americans are still expected to qualify for student loan forgiveness.
So, don’t give up on the American Dream folks!
Some students will still be able to still splurge on that Friday Night pizza.
Link to Joint Governors Letter Opposing Student Debt Forgiveness Loans