Biden’s student loan forgiveness plan stokes massive reaction

President Joe Biden finally announced his long-teased student loan forgiveness plan. Reaction to the program was swift from all corners of the country.

The White House shared the plan in a tweet Wednesday, revealing that the government would forgive $10,000 in federal student debt for every borrower who makes less than $125,000 per year, and $20,000 of Pell Grant recipients’ debt. The plan also includes a final freeze on loan payments and interest until Dec. 31 and caps repayment of undergraduate loans at 5% of a debtor’s monthly income.

“In keeping with my campaign promise, my Administration is announcing a plan to give working and middle class families breathing room as they prepare to resume federal student loan payments in January 2023,” the president tweeted.

Many liberals who have long pressured Biden to deliver on what has become one of their leading agenda items praised the announcement. And the beneficiaries of the plan — Americans who signed contracts for these loans — lauded the move that will leave them debt-free. According to the Associated Press, the plan will wipe-out the entire student debt load of millions of Americans and erase at least half the debt for millions more.

However, there has been criticism of the plan aplenty — from across the political spectrum.

More than a year ago, House Speaker Nancy Pelosi, D-Calif., declared that the president does not have the power to forgive student debt.

“The president can’t do it,” Pelosi said at a July 28, 2021, press briefing. “That’s not even a discussion.”

“People think that the president of the United States has the power for debt forgiveness,” she said. “He does not. He can postpone, he can delay, but he does not have that power,” adding that student loan forgiveness can be accomplished only through “an act of Congress.”

However, after the president made his Twitter announcement, Pelosi stated, “President Biden’s bold action is a strong step in Democrats’ fight to expand access to higher education and empower every American to reach fulfillment. By delivering historic targeted student debt relief to millions of borrowers, more working families will be able to meet their kitchen table needs as they continue to recover from the challenges of the pandemic.”

The NAACP criticized the plan for not going far enough and leaving too many borrowers behind. And progressive activist Nina Turner labeled the plan a public relations move and called on the administration to “cancel all student debt.”

Other critics of the plan say the entire idea of debt forgiveness is a farce, arguing that taxpayers will be on the hook for the debt. Larry Summers, who served as President Barack Obama’s top economic adviser, said Biden’s move will only increase demand, drive up more debt, and raise inflation.

A CNBC poll showed that a significant majority of Americans agree with Summer’s assessment.

Sen. Mitt Romney, R-Utah, ripped the plan as an attempt to “bribe the voters” that “fuels inflation, foots taxpayers with other people’s financial obligations, is unfair to those who paid their own way & creates irresponsible expectations.”