Summary by JW Williams
President Biden proposes canceling up to $10,000 for borrowers who earn under $125,000. In addition, $20,000 will be canceled for Pell Grants. Biden’s student bailout does nothing to address the real problem, which is the soaring cost of higher education.
The White House claims that nearly 45% of student loan borrowers, almost 20 million people, will have their debt wiped out.
The total amount of student loan debt in America is $1.7 trillion. The underlying issue of higher education is its skyrocketing cost while schools like Harvard maintains a $60 billion endowment and Yale has a $40 billion endowment. JD Vance says that school administrators, the people who have benefited from student loans and enable schools to raise tuition, should be penalized. He said this scheme is a money transfer from the middle class to the upper class.
An estimate of the cost of the $10,000 giveaway to student borrowers varies from $244 billion over 10 years to the Penn Wharton Budget Model that estimates it at $329 billion. On top of that, another $120 billion or more will be added as $20,000 will be wiped from Pell Grants recipients.
There were 158 million taxpayers in 2019, and the National Taxpayers Union found that if the lower estimate of $244 billion is correct, each taxpayer will owe $2,085.59.
Barack Obama’s former economic advisor, Jason Furman, said the policy is reckless and will cost about $500 billion, which is not paid for. Furman warned that the action could cause higher tuition in the future, encourage more borrowing and create expectations of future debt forgiveness. He said that everyone will pay for this in the form or higher inflation or higher taxes or lower benefits in the future. Finally, he said that Biden probably doesn’t have the power to unilaterally cancel student loan debt.
FLASHBACK VIDEO from 2020:
Tucker Carlson exposes wealthy Ivy League private schools that received nearly $54 million as part of the CARES Act during the COVID-19 crisis. Harvard, Yale, Princeton, Brown, Cornell, Penn, Columbia and Dartmouth — all eight schools moved most of their operations online and had no plans to refund tuition dollars with their own coffers. In 2020, the average annual cost of tuition and fees at an Ivy League university was about $53,000.