Biden’s student loan plan “will make college much more expensive,” says Reason Magazine:
Last week, President Joe Biden announced that the federal government would forgive between $10,000 and $20,000 of student loan debt for qualifying borrowers who make less than $125,000 per year. But that wasn’t all: Biden also said that he would create a new income-driven repayment (IDR) system for college borrowers.
The IDR aspect of Biden’s plan attracted less scrutiny than the direct forgiveness aspect, which will cost at least $300 billion (and probably much, much more) in the immediate future. But in the long-term, this aggressive move toward an income-driven model of repaying college loans will probably have a bigger impact—and that impact will be catastrophic. In fact, unless the government does something to constrain colleges’ ability to set their own prices, IDR could break the entire higher education financing system and lead to skyrocketing costs for taxpayers…..That’s because both the borrowers and the universities will have increased incentive to bilk the people who actually make the loan: the taxpayers….Something close to this scheme already exists in law schools, which have Loan Repayment Assistance Programs (LRAPS).
For how this scam works, and how it will cost taxpayers hundreds of billions of dollars or more, visit this link: https://reason.com/2022/08/30/biden-student-loans-income-driven-repayment-college/
Biden’s student loan plan could cost over a trillion dollars, according to analysts at the University of Pennsylvania’s Wharton School, taking into account changes made by Biden to income-driven repayment plans.
Biden’s plan may also may be illegal. As the College Fix notes, “An analysis from the Texas Public Policy Foundation concluded that an executive order bailout is likely illegal. Alan Dershowitz, professor emeritus at Harvard Law school, has also said that a student bailout through executive action would be illegal.”
Biden’s plan is also likely to increase college tuition and inflation. Jason Furman, chairman of President Obama’s Council of Economic Advisers, calls Biden’s plan “reckless.” Furman says “Pouring roughly half trillion dollars of gasoline on the inflationary fire that is already burning is reckless.” Biden’s plan will increase economic inequality and the national debt. Even the liberal Washington Post calls Biden’s student-loan bailout “a regressive, expensive mistake.”
While Biden is writing off some student loans for high-income college graduates, he has left intact far more burdensome obligations imposed by the government on some working-class people who never went to college — obligations that federal law prevents from being modified, even when that leads to impoverishment and incarceration.