U.S. Action Forum President Doug Holtz-Eakin argues that forgiveness of student loans ‘does nothing’ to improve education and that it will tax the taxpayers.
Elected President Joe Biden can approve his pledge to cancel millions of dollars in student loan debt after Democrats overturned the Senate last week, gaining a monopoly on power for the first time in more than a decade.
The incoming Biden government plans to ask Congress to immediately cancel $ 10,000 in student debt for all borrowers – a move that is likely to draw criticism from both Republicans who are wary of the country’s balloon shortage and progressive Democrats who want the president further left on the issue.
Sens. Chuck Schumer, DN.Y., and Elizabeth Warren, D-Mass., As well as representatives Alexandria Ocasio-Cortez, DN.Y., and Ayanna Pressley, D-Mass., Urged Biden to use executive power to $ 50,000 to cancel outstanding federal student loans per borrower.
COMMANDED CALLS FOR CLEARING OUT DEBT OF THE STUDENT LOAN IS PROGRESSIVELY PRESSURE TO GO AHEAD
Warren said Biden could use existing executive power under the Higher Education Act to order the Department of Education to cancel student loan debt. Previous estimates show that the proposal will provide total forgiveness to more than 75% of borrowers and partial forgiveness for more than 95%.
“We have to push the Biden government hard,” Ocasio-Cortez told Punchbowl News last week. “This case,” we can not cancel the student loan debt, is not going to fly. ‘
But Biden said it was “disputed” whether the president had the power to forgive $ 50,000 in student debt without congressional approval.
‘I’m going to have a hard time saying that, [but] “It can be disputed that the president has the executive power to forgive up to $ 50,000 in student debt,” Biden told The Washington Post in December. ‘Well, I think it’s pretty dubious. I’m not sure about that. I probably would not do that. ”
Under legislation enacted by Biden, borrowers in financial need will immediately drop $ 10,000 in student debt. The government will also pay monthly loans to people with private student loans until September 2021 and forgive $ 10,000 of their debt.
AOC INSIST BODE CAN USE EXECUTIVE ORDER TO CANCEL DEBT OF STUDENT LOANS
“Immediate forgiveness of $ 10,000 for student loans, which helps people up there in real trouble,” Biden said in November. ‘They have to choose between paying their student loan and paying the rent. These kinds of decisions. ”
Critics of the cancellation of large shares have also argued that it will be excessively beneficial to higher-income individuals who are unlikely to have lost their jobs during the recession caused by pandemics. More than 70% of the dismissed workers do not have a bachelor’s degree, including 43% who were not at university at all.
Less than one-third of all student debt is owned by households without a bachelor’s degree, while households with graduate degrees own almost two – fifths of the debt. A recent survey conducted by the Pew Research Center shows that most economic problems during the crisis are concentrated among less educated people.
Analysis of the Committee for a Responsible Federal Budget shows that the cancellation of student loan debt is an ineffective stimulus measure: eliminating $ 1.5 billion in loans would amount to only $ 90 billion or less in cash available to spend in 2021, and $ 450 billion over the next five years.
GET FOX BUSINESS ON THE GO by clicking here
“The majority of those most affected by the current economic crisis are likely to have little or no student debt,” the analysis said, pointing out that more than 70% of unemployed workers do not have a bachelor’s degree. “It is unlikely that broad cancellation of student debt will be well targeted at those experiencing income loss. It is also not well targeted at those with low incomes.”
Outstanding student loan debt has doubled in the past decade to nearly $ 1.7 billion. About one in six American adults owes debt on federal student loan debt, which is the largest amount of non-mortgage debt in the United States. It is cited by Federal Reserve Chairman Jerome Powell as a major obstacle in people’s “economic life.”
Biden has also promised to extend the Trump administration’s interruption over federal student loan payments, which expire this month. It is unclear how long Biden would extend the payment freeze.
“On the first day, the elected president will order the Department of Education to extend the existing interruption of student loan payments and interest to millions of Americans with federal student loans,” said David Kamin, the incoming deputy director of the National Economic Council.