Economists have shared their views of a harsh reality for President Joe Biden's student loan forgiveness, arguing that the program will "blow up in his face" as it is "over $4 trillion of spending."
Steve Moore said that the White House billed the handout as "forgiveness" but economists pointed out that mathematically, the debt cannot simply disappear. Moore noted that it was almost comical that the Biden administration was talking about how they reduce the deficit and debt.
Biden's Student Loan Forgiveness
He argued that in fact, since the Democrat took office in January 2021, adding up all of the spending bills, and adding $500 billion more per student relief, would cost trillions of dollars. Moore noted that this amount of debt and spending is the biggest weight on the United States economy.
Moore said that it was the thing that makes him the most nervous about what the country is doing to the future of its people and its ability to create a prosperous society. The economist added that Biden did not receive the great political benefit that he expected after writing-off part of the debts of mostly white-collar college students, as per Fox News.
He argued that the president ignored blue-collar tradesmen and students, along with the workers in the economy who did not attend postsecondary educational institutions altogether. Moore cited a report from a University of Chicago economist, who tallied the collective financial value of all federal government handouts.
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This ranged from free health care to food stamps and subsidized housing and education, saying that the total exceeded the average salary for a U.S. citizen. Moore said that with all of that money, an individual can make $80,000 to $90,000 per year and not work a single hour.
According to CNBC, many new details have emerged about Biden's student loan forgiveness in the last two weeks since its announcement. The new information includes who qualifies for the program and when borrowers may see their balances reduced.
Republicans' Legal Challenge
On the other hand, there were reports that some Republicans could try to bring a legal challenge against the policy which means the relief could be thrown in jeopardy. However, borrowers should still stay updated on the process and take all necessary steps, said higher education expert Mark Kantrowitz.
Kantrowitz noted that borrowers should continue to be cautiously optimistic and apply for forgiveness despite the uncertainty of the program. The package includes the removal of up to $10,000 if an individual did not receive a Pell Grant, otherwise, they would receive up to $20,000 relief instead.
Despite the potential benefits of the student loan forgiveness plan, some borrowers argue that is a surprisingly small amount of debt relief. A 42-year-old psychologist from New Mexico, Ben Greenberg, said that it cost him $400,000 to finish his degree and noted that interest continues to rack up.
He argued that instead of a flat rate, Biden's student loan forgiveness should have been a percentage. Greenberg noted that this would have done more to address victims of the system and those with graduate degrees who had to finance their own education and were unable to work due to academic demands or disability, The Guardian reported.
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