US Taxpayers Forced to Pay an Additional $559B in Student Loan Forgiveness


Posted originally on May 8, 2024 By Martin Armstrong 

StudentBrainwashedCollege

Short of joining Hamas, there is nothing Joe Biden will not do to secure the Gen Z vote. The latest plan will “forgive” $7.4 billion worth of student loans, which brings the total of loan cancelations under Biden to $153 billion. This new wave will benefit 277,000 borrowers/voters and cost the American public $559,000,000,000.

The original student loan forgiveness plan backfired, plain and simple. Payments were frozen in March 2020 under the CARES Act when countless people were out of work, and the program made sense. Millions of people simply stopped paying their loans as they believed Biden’s campaign promise to make all student loans vanish into thin air. By July 2023, over 7.5 million borrowers had defaulted on their student loan payments. Millions more were set to default in September 2023, when the COVID provisions were set to end. The Department of Education then decided to create an “on-ramp” period until September 2024 so that anyone who missed a payment would not face consequences.

Biden has “forgiven” billions in student loan debt since then, adding to the overall deficit and taxpayer burden. Amid low polls and pushback from academics and universities, Biden has decided to introduce a new wave of loan forgiveness. He has implemented the SAVE plan which has quickly shot up in costs from $475 billion to $559 billion. The SAVE income-driven repayment plan bases payments on a percentage of discretionary income, but low-income borrowers may be completely off the hook from paying back the debt they agreed to take on.

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“As long as there are people with overwhelming student loan debt competing with basic needs such as food and healthcare, we will remain relentless in our pursuit to bring relief to millions across the country,” Biden stated. What about the American public that has seen the value of their dollar decline drastically since Biden took office? Joe Biden is blatantly BUYING VOTES and ignoring the economic implications as our national debt is perhaps the largest threat to our national security.

Halting repayments after the government agrees to shut down the global economy is one thing. Saddling the average American with additional tax obligations is extortion and economic tyranny. No one will forgive your mortgage loan, for example, a cost you agreed to take on. Biden continues to hunt down the American public for taxes to pay for his ridiculous spending plans that only benefit him and a select group of voters. The expected cost of student loan redistribution to the taxpayers continues multiplying as Biden’s poll numbers drop.

Supreme Court Rules Biden Student Loan Forgiveness Program Exceeds Constitutional Constraints


Posted originally on the CTH on June 30, 2023 | Sundance 

After a legal debate about standing in the case of Biden v Nebraska, the Supreme Court took up the issue of whether the President could unilaterally forgive student debt without an act of Congress.  In a 6-3 ruling {pdf here}, the court determined the executive authority of the Dept of Education did not permit such action.

Joe Biden campaigned in 2020 on a promise to eliminate student debt unilaterally, without congressional approval.  The court opinion released today affirms that Congress must be involved in their role as decision-makers of federal spending.  Justice John Roberts wrote the majority opinion.

[SCOTUS BLOG] – […] When the Biden administration announced the program in August 2022, student-loan repayments had already been on hold for over two years. Betsy DeVos, who served as the secretary of education during the Trump administration, suspended both repayments and the accrual of interest on federal student loans at the start of the COVID-19 pandemic. She relied on the HEROES Act, a law passed in the wake of the Sept. 11 attacks that gives the secretary of education the power to respond to a national emergency by “waiv[ing] or modify[ing] any statutory or regulatory provision” governing the student-loan programs so that borrowers are not worse off financially because of the emergency.

[…]  The HEROES Act, Roberts emphasized, gives the secretary of education the power to “waive or modify” laws and regulations governing the student-loan programs. Congress’s use of the word “modify” means that the Biden administration can make “modest adjustments and additions to existing provisions,” Roberts wrote, “not transform them.” But the debt-relief program, Roberts stressed, instead “created a novel and fundamentally different loan forgiveness program.” The plan “modifies” student-loan laws and regulations, Roberts suggested, “only in the same sense that the French Revolution ‘modified’ the status of the French nobility — it has abolished them and supplanted them with a new regime entirely.”  

Roberts rejected the Biden administration’s contention that the secretary of education also has the power to “waive” laws and regulations relating to the student-loan program. When the secretary has invoked this power in the past, Roberts observed, he has done so for a specific legal requirement, such as the requirement that a student provide a written request for a leave of absence. But in this case, Roberts noted, the secretary has not indicated that he is waiving a specific provision.

Roberts also rebuffed the Biden administration’s argument that the debt-relief program is consistent with the purpose of the HEROES Act – that is, to give the secretary of education the power to provide relief to borrowers during a national emergency. “The question here,” Roberts countered, “is not whether something should be done; it is who has the authority to do it.” On this point, Roberts invoked the “major questions” doctrine, which is the idea that if Congress wants to give an administrative agency the power to make decisions of vast economic or political significance, it must say so clearly. But in this case, Roberts said, the HEROES Act did not authorize the debt-relief program at all, much less clearly. (read more

Additionally, the court also released a decision on a Colorado law that forced a Christian website designer to create wedding websites against her First Amendment right to free speech and freedom of religion.  {pdf HERE}

The court ruled the state cannot enforce a state anti-discrimination law against a Christian website designer who does not want to create wedding websites for same-sex couples, because doing so would violate her First Amendment right.

The First Amendment, Gorsuch explained, “protects an individual’s right to speak his mind,” even when others may regard that speech as “deeply misguided” or it may cause “anguish.” And the First Amendment generally also protects an individual from being required by the government to voice a particular message.

In this case, Gorsuch observed, even the U.S. Court of Appeals for the 10th Circuit agreed that the websites that Smith wants to create are speech. But if Smith wants to speak, he stressed, she must choose between following her conscience, which means only creating wedding websites for opposite-sex couples, and violating Colorado law, or following the law and violating her religious beliefs.

Under the Supreme Court’s cases interpreting the First Amendment, Gorsuch concluded, “that is enough, more than enough, to represent an impermissible abridgment of the First Amendment’s right to speak freely.” (read more)

Critics of the decision argue this precedent now permits public businesses to discriminate based on all sorts of issues they will define as their speech rights.  However, public businesses are currently permitted to discriminate, as long as that discrimination does not violate constitutional rights (ex. freedom of religious belief) or specifically tailored categories.  States cannot pass laws that force or compel people to violate their First Amendment rights.

The conservative-right and the moonbat-left will never give him credit, but Trump’s three SCOTUS appointments are delivering measured positive results.

Student Loan Forgiveness Promise Backfires


Armstrong Economics Blog/Education Re-Posted Jun 21, 2023 by Martin Armstrong

The student loan forgiveness plan backfired plain and simple. Payments were frozen three years ago in March 2020 under the CARES Act when countless people were out of work and the program made sense. Then Biden campaigned on a promise to eliminate a portion of that debt with no real plan in place. One must wonder if he thought his lofty promise to buy votes was even a possibility. The Education Department announced that debtors must resume payments by October, and interest on those loans will resume in September. This will affect 44 million Americans. The country is dependent on consumer spending for a third of GDP, and the average American’s disposable income is dwindling amid the overall increased cost of living and taxation to fund reckless government spending. The one-issue voters who backed the Dems for this reason may want to reconsider their choice come November.

The National Bureau of Economic Research (NBER) conducted a study that found the promise of forgiving debts actually created a worse financial situation for many Americans. Household leverage rose 3% during this pause as borrowers increased their private debts. “Comparing borrowers whose loans were frozen with borrowers whose loans were not frozen due to differences in whether the government owned the loans, we show that borrowers used the new liquidity to increase borrowing on credit cards, mortgages, and auto loans rather than avoid delinquencies,” the study found. So the study found that these people were more likely to accumulate credit card debt, which is at an all-time high. They also found that these individuals were more likely to direct the funds for mortgages and auto loans, which may be at an all-time high for this particular generation of younger adults.

Countless people truly believed their federal student loan payments would vanish in thin air. It is hard to blame them as the president repeatedly promised he had the power to make this happen. Some who left school in 2020 have never made a student loan payment or factored that cost into their monthly expenses. Over 7.5 million borrowers have already defaulted on their student loans. There will be a major issue here once these borrowers see their monthly expenses rise by a few hundred dollars.