The Republican-led House resolution to revoke President Biden’s risky plan to cancel wealthy people’s student loans is scheduled to be discussed by the Senate today. The National Taxpayers Union Foundation (NTUF) released updated data prior to the Senate vote that illustrates the total cost to taxpayers in each state of Biden’s student loan cancellation.
The Bottom Line: The people who couldn’t afford to attend college, the taxpayers who will bear the burden, and the students who put in the effort to complete their education are all severely harmed by President Biden’s regressive student loan debt bailout. Republicans will keep trying to stop Biden’s extravagant spending and undo this loan to the rich. To view the complete state-by-state breakdown from NTUF, CLICK HERE or scroll down.
‘Shifting one kind of borrowing to another’
Canceling student debt will boost near-term inflation more than the Inflation Reduction Act that was recently enacted would reduce it, the Committee for a Responsible Federal Budget found in a recent analysis. Moreover, it found that canceling student debt would also undermine the deficit reductions in that law recently passed by Democrats.
Millions of borrowers with student loans will no longer have debt thanks to this action, but it also means the government will have to borrow money to pay for it.
The Committee for a Responsible Federal Budget estimates Bidens broad debt cancellation will cost between $330 billion and $390 billion. The overall plan will cost between $440 billion and $600 billion over the next 10 years, according to the nonpartisan organization, with a central estimate of approximately $500 billion.
Maya MacGuineas, president of the Committee for a Responsible Federal Budget, stated, “This is not paid for.” “This is just shifting one kind of borrowing to another. “.
The Penn Wharton Budget Model now estimates debt cancellation alone will cost up to $519 billion. Loan forbearance will cost another $16 billion, the research found, while the new income-driven repayment could cost $70 billion.
According to the Penn Wharton Budget Model, households making $88,000 or less annually will benefit from about 25% of the student loan cancellation.
The policy’s overall cost has not yet been assessed by the Congressional Budget Office.
Biden’s forgiveness plan, according to Lautz and MacGuineas, falls short of addressing the underlying issue that leads student borrowers to accumulate such massive debt loads in the first place.
MacGuineas stated, “One of the most challenging, complex issues in higher education is how universities and graduate schools are funded and what kinds of changes would make it more affordable.” “This accomplishes none of that. “.
FAQ
How much money is spent on student loan forgiveness?
“Today’s data clearly demonstrate how the Biden-Harris Administration’s unwavering efforts to improve the dysfunctional student loan system are paying off handsomely, with over three Almost $132 billion in loan forgiveness has now been approved for 6 million borrowers.
Are taxes going up because of student loan forgiveness?
Bottom line. Thanks to the most recent American Rescue Plan, which makes all student loan forgiveness tax-free, your federal taxable income in 2022 won’t increase when you forgive your student loans.
How does student loan debt forgiveness affect the economy?
Student loan debt restricts consumer spending and slows the growth of new businesses. By making it more affordable for borrowers to participate in the national economy, widespread student loan debt forgiveness may contribute to its growth.
How much does the government spend on student loans?
Education initially projected that the government would receive $114 billion in revenue from these loans. The federal government is expected to pay $197 billion for these loans as of fiscal year 2021, even though exact costs won’t be known until the loan terms are over.
Read More :
https://budget.house.gov/press-release/bidens-student-loan-bailout-will-cost-average-taxpayer-3526-state-by-state-breakdown
https://www.help.senate.gov/ranking/newsroom/press/new-analysis-bidens-newest-student-loan-scheme-to-cost-taxpayers-559-billion