Biden Regime Trots Out Their Plan To Cut Payments For Those With Student Loans

It’s a serious far cry from Brandon’s  promise to wipe out student loan debt

(Daily Caller) The Biden administration is planning to use a generous income-driven repayment plan as its main method of easing student loan debt following the Supreme Court’s Friday ruling that blocked the administration’s plan to grant student loan forgiveness to nearly 40 million Americans.

The Supreme Court ruled 6-3 that the Biden administration cannot use executive power in order to cancel up to $10,000 in student loan debt for non-Pell Grant recipients and up to $20,000 for Pell Grant recipients. To circumvent the Supreme Court’s ruling, the Department of Education (DOE) plans to use the Higher Education Act as well as expand income-driven repayment plans, which would cut payments for those making $32,800 or less annually to $0, according to a Saturday press release.

You have a college degree and you’re making $32,800 or less? How much debt did you put yourself in, and why did you get such a worthless degree? You could have just gone to community college or a trade school and made more.

Under the DOE’s repayment plans, borrowers who miss payments within the first year, beginning Oct. 1, will not be penalized, reported to credit or collection agencies or put in default, the WSJ reported. The DOE estimates that their expansion of income-driven repayment plans will save all borrowers at least $1,000 per year.

The department’s revamped income-driven repayment plans are estimated to cost taxpayers more than one-time outright forgiveness, according to a Penn Wharton Budget Model report.

How many will actually qualify for this, if it’s about people making that little money/$15 an hour? How much damage can the plan do?

(NY Post) While everyone’s focus has been on the administration’s outrageous cancellation stunt, the DOE has been working tirelessly to accomplish an even more disastrous policy: a new Income-Driven Repayment rule.

The federal student-loan policy is obscenely complex, but under the Higher Education Act, Congress created a variety of programs to help borrowers who struggle to pay their loans.

Those include Income Contingent Repayment and Income-Based Repayment programs.

With varying terms, these programs limit borrowers’ monthly payments to a percentage of their income. IBR also includes a forgiveness provision after a borrower has made payments for 20 years.

When Congress wrote the law, they essentially gave away all the power, allowing the DOE to make all the rules

Under the new plan, in a variety of formulations, the secretary proposes to dramatically reduce the monthly payments of most borrowers, with millions looking at payments of $0, while also reducing the time to forgiveness to as short as 10 years.

In other words, while styled as a rule that simply tinkers with the details of existing income-based repayment programs, it effectively does the same work as the cancellation effort: It writes off the debts of millions of college-educated borrowers.

The Penn Wharton Budget Model estimated that the actual program costs between $333 billion and $361 billion over 10 years.

Estimates that account for tuition inflation and future borrowing costs put government expenditures as high as $1 trillion.

Except a lawsuit on this, since Article I forbids giving away Congressional power, as well as “requires federal expenditures to be “in consequence of appropriations made by law.”” Besides the lawsuit question, another is how long it will take to truly get this in place, as it will take months to get it in place and it is supposed to be very difficult to navigate.

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2 Responses to “Biden Regime Trots Out Their Plan To Cut Payments For Those With Student Loans”

  1. Professor Hale says:

    and why did you get such a worthless degree?

    Activists get these degrees. And because they don’t lead to jobs, they have plenty of time to donate to Democratic party campaigns and … activism. Naturally, Democrats in power want to offer them some “payback”.

  2. Elwood P. Dowd says:

    The proximate causes of tuition inflation are familiar: administrative bloat, overbuilding of campus amenities, a model dependent on high-wage labor, and the easy availability of subsidized student loans. – Forbes 2020

    I taught as an adjunct professor at a local university that seemed to have more Deans, Asst Deans, Assistants to the Dean, Chairpersons and Vice-Deans than tenured professors. Many colleges cut costs by hiring adjunct teachers rather than full-time employees.

    Not to mention the plague of for-profit “colleges”, like Trump or DeVry “University”. Some of these do function effectively as vocational schools (carpenters, plumbers, machinists, electricians, computer techs, health care assistants) but others, like Trump “University”, are or were scams. I have two young relatives who completed for-profit school programs that led to well-paying technical jobs!! One in computer operations another in computer-aided machining. Neither of these young men had the time or attitude for traditional college so these focused training degrees were perfect for them.

    Also, relatively inexpensive 2 year colleges (almost all state schools) with transferrable course offerings, can cut costs compared to a 4 year school.

    There exist databases where one can estimate the true costs of a non-profit college education AND the expected benefit in terms of job availability and pay, but most colleges and universities have no desire to make this data available.

    Regarding a recent settlement against for-profits DeVry and ITT Tech (and others), the Sec of Ed said “Students count on their colleges to be truthful. Unfortunately, today’s findings show too many instances in which students were misled into loans at institutions or programs that could not deliver what they’d promised.”

    As always, too much capitalism (and greed) can be a bad thing.

    So yes, give the college kids with loans a break.

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