Chanel Rion, OAN Chief White House Correspondent
UPDATED 1:01 PM PT – Wednesday, August 24, 2022
The plan would cost the American taxpayer as much as $950 BILLION over 10 years. MAJORITY of “relief” would go to top 13% of Americans who enjoy GRADUATE degrees.
President Biden announced Wednesday from the White House his plan to cancel $10,000 in student loans per student making less than $125,000 per year. The plan would also extend the student loan repayment pause by 4 months – to December 2022.
Biden framed his plan as one that would benefit lower income and middle income Americans. He stated:
“Nearly 45% [of federal student loan borrowers] can have their student debt fully canceled. That’s 20 million people who can start getting on with their lives.”
But critics have been quick to point out this scale of loan forgiveness would force all of taxpaying America to pay for student loans disproportionately taken out by a small minority of Americans.
Republican Senator Tom Cotton tweeted on the topic:
There is no such thing as student loan forgiveness—this is a bailout, paid for by the large majority of Americans who never went to college or who responsibly paid off their debts.
— Tom Cotton (@SenTomCotton) August 24, 2022
This criticism is grounded in the fact that less than 40% of Americans have a four year undergraduate degree. And only 13% hold graduate degrees that tend to yield higher paying jobs.
The inequality of forcing all Americans to foot the bill on these student loans lies in the fact that a whopping 56% of all student loans taken out in America are taken out by the 13% who have graduate degrees.
But criticism of Biden’s student loan handout plan is not relegated to those on the right. Critics on the left have also slammed the plan as one that will aggravate already record high inflation rates
Top Obama economic advisor Larry Summers has argued extending the student loan repayment program or simply wiping away student debt at this time would make inflation worse.
I hope the Administration does not contribute to inflation macro economically by offering unreasonably generous student loan relief or micro economically by encouraging college tuition increases.
— Lawrence H. Summers (@LHSummers) August 22, 2022
Biden’s plan would cost up to $950 Billion over the next 10 years.
Summers has softened his criticism of Biden’s plan by calling for a bankruptcy release valve to be made available for students seeking debt relief. A position long advocated by Democratic Senator Elizabeth Warren.
As Biden concluded his remarks Wednesday laying out his debt forgiveness plan, he refused to answer any questions about whether his plan was fair to those Americans who did not have student loans or had already paid them off.