President Joe Biden could cost American taxpayers another $750 billion with his latest student loan handout, Fox Business reported. This attempt follows a previous loan forgiveness effort struck down by the Supreme Court.
The proposal was announced last week as another attempt to ram through a plan to cancel student debt. The Department of Education said it would apply to as many as 30 million borrowers and proposed a modest cost estimate of $150 billion.
A more realistic assessment from the Committee for a Responsible Federal Budget finds it could be at least triple that amount. The official Education Department estimate doesn't take into account cases where the Secretary of Education would cancel debt anyway, such as default and hardship cases.
"Including this provision, we estimate the plan could cost $250 billion to $750 billion, depending on how the additional cancellation is designed," the CRFB found. An estimate from the Wharton School of the University of Pennsylvania similarly found that the cost could balloon as high as $559 billion.
The loan forgiveness plan has several details that make it a costly endeavor. One troublesome provision includes debt cancellation for those who have a nebulously-defined "hardship" to bear.
"It is unclear how the Administration will define hardship, but they discuss 16 possible criteria such as other consumer debt, age, and health care or housing expenses and also declare hardship could be defined based on ‘any other indicators of hardship identified by the Secretary,"’ the report said. Some are also granted loan forgiveness if they're in danger of defaulting.
"In assessing default risk, the rule allows for cancellation for those with an 80 percent likelihood of default, as determined by the Secretary. Importantly, over $150 billion of debt is currently in default (and loans in default generally have around a 70 percent recovery rate)," the CRFB also found.
Another provision would grant full cancellation to those who have been paying their undergraduate loans for more than 20 years and 25 years for graduate education, NBC News reported. People who didn't even apply for forgiveness would also be granted it.
The people who chose their majors poorly would also receive loan forgiveness under this new plan. Borrowers who attended schools or programs that have low financial returns would also be eligible to receive the government handout.
This latest proposal is a continuation of Biden's previous defiance in the face of the Supreme Court's decision. During his remarks on June 30, Biden promised to "stop at nothing" to make student loan forgiveness happen.
"I believe that the Court’s decision to strike down our student debt relief plan is wrong, But I will stop at nothing to find other ways to deliver relief to hard-working middle-class families. My Administration will continue to work to bring the promise of higher education to every American," Biden said.
So far, Attorney General Andrew Bailey has already promised to sue Biden for attempting to run roughshod over the court. "Joe Biden is trying to unabashedly eclipse the Constitution with his attempt to 'cancel' student loan debt. The rule of law means something in this country, @POTUS. See you in court," Baily wrote on April 8 when Biden first spoke about his new proposal.
Joe Biden is trying to unabashedly eclipse the Constitution with his attempt to “cancel” student loan debt.
The rule of law means something in this country, @POTUS.
See you in court.
— Attorney General Andrew Bailey (@AGAndrewBailey) April 8, 2024
Biden is continuing to push for student loan forgiveness because he needs the youth vote to get reelected. This amounts to buying votes, but the president has no shame in doing just that even if it means defying the Supreme Court.
