President Joe Biden is receiving criticism for his student loan cancellation plan.
On Wednesday, The Washington Post’s editorial board ripped into the decision in an editorial titled, “Biden’s student loan announcement is a regressive, expensive mistake.” It wrote, “Under progressive pressure to force grandiose policy changes, President Biden has generally embraced sensible reforms over flashy gimmicks. But his Wednesday student loan announcement did just the opposite.”
The editorial noted that then-President Donald Trump implemented a freeze on student loan payments in Mar. 2020 due to the COVID-19 pandemic. But it added, “Thankfully, the situation is very different today: The unemployment rate for people with bachelor’s degrees and higher is just 2 percent. It’s hard to make the case that college graduates are still facing an unprecedented crisis.”
“The loan-forgiveness decision is even worse. Widely canceling student loan debt is regressive. It takes money from the broader tax base, mostly made up of workers who did not go to college, to subsidize the education debt of people with valuable degrees,” the opinion piece stated.
Biden’s student loan announcement is a regressive, expensive mistake, the Editorial Board writes. https://t.co/Dif60DHzUI
— Washington Post Opinions (@PostOpinions) August 24, 2022
It went on to note that while the plan has a $125,000 a year income cap to be eligible for the cancellation, it “does not reflect need or earnings potential, meaning white-collar professionals with high future salaries stand to benefit.”
“Mr. Biden’s plan is also expensive — and likely inflationary. The Committee for a Responsible Federal Budget estimates that extending the loan pause to the end of the year would cost $20 billion, while forgiving $10,000 for households making less than $300,000 would cost $230 billion. Together, these policies would nullify nearly a decade’s worth of deficit reduction from the Inflation Reduction Act,” the editorial board added.
However, it did praise Biden for rejecting calls to cancel up to $50,000 in student loan debt per borrower.
Instead of canceling debt, the Post suggested a “better approach” would have been to “focus on expanding Pell Grants and other college finance programs pinpointed to the truly needy.”
“And, as with other worthy programs, Congress and the Biden administration should find a credible way to pay for such an expansion, rather than just adding more to the national tab,” it added.
Finally, the editorial stated, “Mr. Biden’s student loan decision will not do enough to help the most vulnerable Americans. It will, however, provide a windfall for those who don’t need it — with American taxpayers footing the bill.”
In a tweet on Wednesday, Biden wrote, “In keeping with my campaign promise, my Administration is announcing a plan to give working and middle class families breathing room as they prepare to resume federal student loan payments in January 2023.”
He shared a graphic that explained that $20,000 of debt would be forgiven for students who went to college on Pell Grants.
In keeping with my campaign promise, my Administration is announcing a plan to give working and middle class families breathing room as they prepare to resume federal student loan payments in January 2023.
— President Biden (@POTUS) August 24, 2022
I'll have more details this afternoon. pic.twitter.com/kuZNqoMe4I
And $10,000 in student loan debt will be forgiven for borrowers who did not receive Pell Grants.
Additionally, his administration will issue a “final” extension of the pause on student loan payments through Dec. 31, 2022.
A “fact-sheet” released by the White House reported that 90% of the benefit of the loan cancellations will “go to borrowers earning less than $75,000 a year.”
It also claims the move will “advance racial equity.”
