Joe Biden unilaterally announced a massive forgiveness of student loans Wednesday afternoon.
Biden canceled up to $10,000 in student debt for borrowers who earn $125,000 a year or less and up to $20,000 for recipients of Pell Grants, according to multiple sources familiar with the matter.” NBC News reported.
“Couples who earn $250,000 a year or less who file taxes jointly would also qualify for cancelation of up to $10,000 for each partner.” NBC News reported.
Joe Biden claimed ‘canceling’ student loan debt (AKA transferring the debt to the middle class) won’t have any “meaningful effect on inflation.”
“Independent experts agree that these actions taken together will provide real benefits for families without meaningful effect on inflation,” said Biden.
WATCH:
STUDENT LOANS: President Biden on student loan forgiveness and ending the pause on student loan payments: “Independent experts agree that these actions taken together will provide real benefits for families without meaningful effect on inflation.” pic.twitter.com/b7WEFjFvNA
— Forbes (@Forbes) August 24, 2022
Even Barack Obama’s former economic advisor Jason Furman says Joe Biden’s policies are reckless.
Pouring roughly half trillion dollars of gasoline on the inflationary fire that is already burning is reckless. Doing it while going well beyond one campaign promise ($10K of student loan relief) and breaking another (all proposals paid for) is even worse.
— Jason Furman (@jasonfurman) August 24, 2022
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.
— Jason Furman (@jasonfurman) August 24, 2022
Most importantly, everyone else will pay for this either in the form of higher inflation or in higher taxes or lower benefits in the future. I did a thread on this last night but given the new announcement you need to double everything in it. https://t.co/CJ7aPYyAw3
— Jason Furman (@jasonfurman) August 24, 2022
Furman also said Joe Biden likely doesn’t have the power to unilaterally cancel student loan debt.
Finally, it’s not obvious to me that this is reasonable for a President to do unilaterally. A number of lawyers (and political leaders) have argued inconsistent with the law. Even if technically legal I don’t like this amount of unilateral Presidential power.
— Jason Furman (@jasonfurman) August 24, 2022
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