Biden Scrambles To Buy Votes With New Taxpayer-Funded Student Debt Relief Scheme

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by Tyler Durden
Tuesday, Apr 09, 2024 - 01:20 AM

After American borrowers adjusted their finances amid the mass-suspension of student loan payments during the pandemic (and the scorching inflation that followed), the Biden administration on Monday announced new student loan plans that would give borrowers up to $20,000 in loan forgiveness for balances that have grown due to unpaid interest since entering repayment, regardless of income.

The plan is aimed at those with "runaway interest."

Those who qualify for the "SAVE IDR" (income-driven repayment) would have the full balance of their unpaid interest forgiven, which would benefit roughly 25 million Americans.

What's more, the administration is also looking to provide automatic debt relief for those who qualify under the SAVE plan, Public Service Loan Forgiveness program, and similar forgiveness programs which have hit red tape when it comes to relief.

Lastly, the plan would give relief to those enrolled in low-financial-value education programs deemed insufficient by the Department of Education, as well as those experiencing hardship in paying back loans and who are at risk of default.

"The Biden-Harris Administration plans to release proposed rules on these plans over the coming months. If these plans are finalized as proposed, this fall the Administration would begin canceling up to $20,000 in interest for millions of borrowers and full loan forgiveness for millions more," the administration said in a Monday statement.

The administration said the White House estimates more than 30 million Americans would have benefited from loan forgiveness from the plans during the past three years.

The administration is also emphasizing how its action will help Black and Latino borrowers and those who went to community college, who are more likely to struggle with student loan debt. -The Hill

"These actions are expected to provide significant relief to Black and Latino borrowers, borrowers who attended community college, and borrowers who are financially vulnerable because they took out debt but never had the chance to complete their degree," according to the administration.

So the Biden administration is taking taxpayer money to pay the banks their interest?