Sputterings of dissatisfaction among Democratic ranks over President Joe Biden’s plan to wipe out at least $10,000 in student loans has erupted into a full-blown civil war within the party, with some claiming the move is ‘out of touch’ with what Americans want.
The shocking price tag of the forgiveness plan is now estimated to cost taxpayers up to $600 billion – even for those who did not take out federal student loans or have already paid it off.
Thousands of families who saved up to pay for college educations are furious that their responsible financial planning will leave them without benefiting one cent from the relief plan and potentially paying roughly $2,000 in taxes to help pay for it.
Democrats, who are fearing a Republican bloodbath in the 2022 midterms, are turning against the president as the White House scrambles to explain how they will pay for the plan.
Education Secretary Miguel Cardona ducked twice when asked by CNN‘s New Day how much the plan would cost and how it would be paid for.
The Committee for a Responsible Federal Budget released estimates Wednesday claiming that the forgiveness plan could cost taxpayers between $400 and $600 billion over the next decade.
This estimate includes the most up-to-date information revealed by the administration and is higher than previous estimates made before Biden announced that Pell Grant borrowers would receive $20,000 in forgiveness while non-Pell Grant recipients stay at the $10,000 figure.
The White House and Education Department did not respond to a DailyMail.com request for comment on the plan to pay for the billions in student loan debt and whether the plan will raise taxes on Americans.
Biden officially announced on Wednesday his administration is forgiving $10,000 in student loans for individuals making less than $125,000 and joint filers making $250,000 combined.
The scale of the gulf in the Democratic Party was made clear when progressive factions demanded all student loan debt be canceled. Meanwhile, more establishment and moderate members are pushing back against the more conservative move the administration made on Wednesday.
A growing number of Democrats are turning against President Joe Biden for his decision to forgive bulk student debt balances on Wednesday
Maine Rep. Jared Golden (left) said the decision is ‘out of touch’ with Americans and Nevada Senator Catherine Cortez Masto (right) said ‘it doesn’t address the root problems that make college unaffordable’
Maine Representative Jared Golden said in a statement: ‘This decision by the president is out of touch with what the majority of the American people want from the White House, which is leadership to address the most immediate challenges the country is facing.’
Fellow Democratic Representative Tim Ryan of Ohio said it ‘sends a wrong message to those without a degree.’
‘While there’s no doubt that a college education should be about opening opportunities,’ the congressman wrote, ‘waiving debt for those already on a trajectory to financial security sends the wrong message to the millions of Ohioans without a degree working just as hard to make ends meet.’
With midterms right around the corner, some Democrats are worried that they will lose favor among those who worked hard to save up, work through or swiftly pay off their student loans.
One of the most vulnerable Democrats in the House, Representative Chris Pappas of New Hampshire, criticized Biden’s decision on student loan forgiveness.
He said the move ‘sidesteps’ Congress and insisted it would do little to fix the core issue of ‘the affordability of higher education.’
The nonprofit Taxpayers Protection Alliance told DailyMail.com that Biden’s plan ‘is a reckless policy that will overwhelmingly benefit wealthy Americans and increase the deficit and debt.’
‘People who either didn’t take out student loans or paid off their loans are frustrated and feel betrayed by the Biden Administration,’ said the group’s President David Williams. ‘It appears that this is yet another move by the White House to buy votes in November rather than address the root cause of inflation or increasing education costs.’
There are growing concerns, especially among Republicans, that the plan isn’t fair and that Americans who did not go to college or aren’t benefiting from the relief will still be helping pay for the program.
GOP Florida Governor Ron DeSantis said hard working blue collar Americans shouldn’t have to pay for liberal elites’ liberal arts degree.
‘It’s very unfair to have a truck driver have to pay back a loan from somebody that got, like, a PHD in gender studies,’ DeSantis said at a press conference on Thursday.
An analysis from the Penn Wharton Budget Model projects the president’s actions will cost taxpayers more than $900 billion and would disproportionately benefit higher-income Americans.
The nonprofit National Taxpayers Union Foundation says, based on the Penn analysis, that canceling this debt could end up costing all American taxpayers $2,085.59.
New Hampshire Democratic Rep. Chris Pappas, among the most vulnerable Democrats, criticized Biden’s move on student loan relief
Biden announced his student loan forgiveness plans via Twitter on Wednesday, hours before his remarks on the move. It includes $10,000 or $20,000 in loan relief, depending on Pell Grant status, for individuals making less than $125,000 and joint filers making less than $250,000
BIDEN’S STUDENT LOAN FORGIVENESS: WHAT IT MEANS FOR BORROWERS
President Joe Biden announced his relief plan for federal student loan borrowers on Wednesday, which includes:
– $10,000 forgiveness for borrowers earning $125,000 individually or $250,000 jointly
– $20,000 forgiveness for Pell Grant recipients earning $125,000 individually or $250,000 jointly
– Aims to cap undergrad loan payments at 5 percent of their monthly income
– Graduate program and Parent Plus loans are eligible
– Student loan repayment pause was extended for the last time until December 31, 2022
Nevada Senator Catherine Cortez Masto, who is facing a tough reelection fight in 2022 against Republican former Nevada Attorney General Adam Laxalt, also spoke out against the decision.
‘I don’t agree with today’s executive action because it doesn’t address the root problems that make college unaffordable,’ she wrote.
‘We should be focusing on passing my legislation to expand Pell Grants for lower income students, target loan forgiveness to those in need, and actually make college more affordable for working families.’
Pappas noted in his statement: ‘We all know the cost of higher education is crushing families, and that’s why I’ve supported expanding Pell Grants, affordable community college, and loan forgiveness for those entering vital professions like nursing.’
‘But this announcement by President Biden is no way to make policy and sidesteps Congress and our oversight and fiscal responsibilities.’
Another Democrat chimed in on Wednesday afternoon – the chair of Barack Obama’s Council of Economic Advisers accused Biden of both exacerbating inflationary pressures while turning his back on one campaign promise to fulfill another.
‘Pouring roughly half trillion dollars of gasoline on the inflationary fire that is already burning is reckless,’ Obama-era economist Jason Furman wrote on Twitter.
A cornerstone of the new policy entails forgiving up to $10,000 in federal student loans for borrowers making under $125,000
‘Doing it while going well beyond one campaign promise ($10K of student loan relief) and breaking another (all proposals paid for) is even worse.’
Pappas, meanwhile, is in a more precarious political position than the majority of his Democratic colleagues.
His seat in New Hampshire’s 1st Congressional District is being eyed by a wide array of Republicans in a 10-way primary race, including a former staffer for New York Rep. Elise Stefanik and former Trump administration aide Karoline Leavitt.
With his district rated an even split between Democrats and Republicans by the nonpartisan Cook Political Report, Pappas is forced to toe the line of moderate politics more so than many of his colleagues – including those that pushed for even more loan forgiveness.
His statement on Biden’s policy continued, ‘Any plan to address student debt should go through the legislative process, and it should be more targeted and paid for so it doesn’t add to the deficit.’
‘The President’s plan also doesn’t address the underlying issue of the affordability of higher education, and it is clear that the high cost continues to limit opportunities available to students,’ Pappas claimed.
Biden was also criticized by veteran White House economic official Jason Fruman (seen next to then-President Barack Obama in 2013
‘Ultimately we must ensure everyone has the chance to further their education and gain the knowledge and skills they need to thrive, and I’ll continue to make that a priority.’
Fruman criticized the White House for highlighting workers in construction, teaching and nursing as beneficiaries when the high income threshold would also allow married couples making a quarter of a million dollars combined to be forgiven up to $40,000 in student debt.
‘There are a number of other highly problematic impacts including encouraging higher tuition in the future, encouraging more borrowing, creating expectations of future debt forgiveness, and more,’ he said.
And later, Pappas was joined by another Congressional Democrat opposed to the forgiveness policy.
Colorado Senator Michael Bennet conceded the adverse effects that the ‘growing’ burden of student loan debt has on Americans,’ but knocked the Biden administration for the broadness of its plan.
‘In my view, the administration should have further targeted the relief, and proposed a way to pay for this plan,’ Bennet said in a statement.
‘While immediate relief to families is important, one-time debt cancelation does not solve the underlying problem.’
The Democrats join a litany of Republicans who have come down on Biden for the move.
‘Washington Democrats have found yet another way to make inflation even worse, reward far-left activists, and achieve nothing for millions of working American families who can barely tread water,’ said Senate GOP Leader Mitch McConnell.
‘President Biden’s student loan socialism is a slap in the face to every family who sacrificed to save for college, every graduate who paid their debt, and every American who chose a certain career path or volunteered to serve in our Armed Forces in order to avoid taking on debt.’
He called the policy ‘astonishingly unfair.’
House Minority Leader Kevin McCarthy, like Pappas, criticized Biden’s move as a ‘bailout for the rich.’
‘In addition to making inflation worse, transferring student debt does nothing to curtail runaway costs in higher education, including graduate schools that charge more and more while delivering less and less,’ the California Republican said.
‘Forgiveness without accountability is a free pass for failed programs with high costs and poor outcomes and would be a green light for colleges to continue tuition hikes.’
Who is eligible for student loan relief and how do you apply? DailyMail.com answers your questions on Biden’s ploy to wipe debt for millions
By: Morgan Phillips, Politics Reporter for DailyMail.com
The Biden administration announced a sweeping plan to wipe out debt and reform student loan borrowing on Wednesday aimed at benefitting 40 million Americans who owe $1.7 trillion in federal student debt.
Here’s what we know about the plan:
Who is eligible?
Those who make under $125,000 as a single person or $250,000 for joint filers are eligible for up to $10,000 in debt forgiveness for their federal loans. For those who received Pell Grants, $20,000 of their debt can be wiped out if they fall under the same salary limits.
It does not matter how much college the borrower attended – forgiveness is offered to everyone from those who dropped out to those who completed graduate school.
Additionally, those who have made payments for 10 years and have loan balances of under $12,000, their debt is forgiven. Previously it took 20 years to have such balances canceled.
How do you apply?
Nearly 8 million people may have their debt canceled automatically because the Education Department already has their income information on file, according to the Federal Student Aid (FSA) website.
The Biden administration plans to launch an application in the coming weeks for borrowers to input their income information. FSA said the application will be available before payments resume on Jan. 1, 2023.
Borrowers can sign up here to be notified when the application is open.
Who is eligible for more relief?
Borrowers who have worked for non-profits, the military, or federal, state, tribal, or local government for 10 years or more could be eligible to have all of their loans wiped out through the Public Service Loan Forgiveness (PSLF) program.
But changes to the PSLF are time-limited, expiring Oct. 31.
The program forgives the remaining balance on your federal student loans after 120 payments working full-time in public service.
What other changes were made?
The student loan repayment pause was extended one final time until Dec. 31, 2022. The Biden administration also adjusted income-based repayment plans so that borrowers do not have to pay more than 5 percent of their monthly discretionary income on undergraduate loans.
At the same time the federal government is now responsible for unpaid monthly interest so ‘no borrower’s loan balance will grow as long as they make their monthly payments.’
Borrowers making a monthly payment of $0 due to unemployment or low income will also be covered.