Welcome to part 1 of a 3-part series that discusses everything you need to know regarding Biden Debt Cancellation.
Perhaps the largest act of bribery committed in Western civilization is that committed by Joe Biden with a stroke of the pen. At a cost estimated by the smart folks at Wharton to run anywhere between $469 billion and $519 billion, his cancellation of student loan debt is clearly designed to make those who had their debt forgiven vote for Democrats out of gratitude and those who are contemplating future student debt vote for Democrats out of hope.
The Marshall Plan is designed to bring Europe together after WWII, achieving a sound objective at a paltry $150 billion in today’s dollars. What is the objective of Biden’s bailout of students? Votes. What will the results likely be? Even higher tuition costs. Nothing noble, just hubris and carnage.
Today Student Loan LandscapeForbes ran a story in September that was well-researched and drew from multiple sources to provide an overview of the current lay of the student loan landscape. Here are a few tidbits to hold onto from that article:
- $1.75 trillion in total student loan debt (including federal and private loans)
- $28,950 owed per borrower on average
- About 92% of all student debt are federal student loans; the remaining amount is private student loans
- 55% of students from public four-year institutions had student loans
- 57% of students from private nonprofit four-year institutions took on education debt
- In constant dollars, tuition costs at both private and public four-year universities have doubled over the past 30 years
Who Holds All the Student Loan Debt?This may catch you by surprise but the federal government holds nearly all the student loan debt in the country. The government takeover of the student loan market is complete as part of the Affordable Care Act (I know, right?). This is what has enabled Biden to so easily forgive student loan debt; The federal government is the actual lender. Typically debt forgiveness is taxable to income to the borrower but that is not the case here. Pause to consider this: Your new IRS agent who shows up to audit you in 2023 is going to have had their debt freshly forgiven without any tax consequence. They are then going to tear your world apart, looking for any amount of money they can wring from your hide, including any advances that a friend or relative might have loaned to you, and then out of kindness, said you didn’t have to pay back! Make you mad? It should! The federal government is printing money to put you or your children into debt and now has added the twist of making your bet that after this round of debt forgiveness, they will do it again in the future. This is the inflationary aspect of the new debt forgiveness program. By signing this legislation, Biden already injected these dollars into the economy. They have already had an inflationary impact on university prices, which has rippled to overall price levels. Students feel like they are “starting over” and will be inclined to borrow more money in the future with the hopes that students will disregard it. This will lead to the federal government printing more money, the universities raising their tuition, the federal government printing more money… Check out part 2 of the Game of loans series to learn more about Biden Debt Cancellation.
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