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Student debt crisis: What’s up with forgiveness and who would foot the bill?

Jul 23, 2021

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As Connecticut State Colleges and Universities announce $17 million in student debt forgiveness using federal grant money, millions of people nationwide are still burdened by their loans.

Several Democrats propose wiping out all outstanding federal student loans, with taxpayers footing the bill. However, many are opposed to the idea, saying it’s unreasonable and, ultimately, unfair.

SHANNON LONGWORTH: 1.7 TRILLION DOLLARS. THAT’S HOW BIG THE STUDENT DEBT IS NATIONWIDE. WHAT IF A LOT OF IT JUST…DISAPPEARED?

CHUCK SCHUMER: COLLEGE SHOULD BE A LADDER UP. FOR TOO MANY PEOPLE, DEBT IS THE ANCHOR THAT WEIGHS THEM DOWN. WE ARE HERE TODAY TO PRESENT OUR PROPOSAL TO CANCEL 50K DOLLARS IN STUDENT DEBT.

RICK SCOTT: NOW THE DEMOCRATS HAVE THEIR NEW GRAND SOLUTION AND IT’S REALLY GREAT THEY WANT TO MAKE IT ALL DISAPPEAR, POOF IT’S GONE.

LONGWORTH: TAXPAYERS WOULD FOOT THE BILL.

BUT SHOULD THEY?

FOR BORROWERS DROWNING IN DEBT, IT CAN’T HAPPEN SOON ENOUGH.

JANICE COMER: I FEEL LIKE I’M STARTING AT A DISADVANTAGE. I AM 25 YEARS OLD. AND RIGHT NOW I’M LITERALLY LIVING OFF OF PENNIES.

FOR THOSE WHO ALREADY PAID OFF THEIR DEBT – OR WHO DECIDED NOT TO GO TO COLLEGE  – THEY’RE SAYING ‘TOUGH LUCK.’

BEN SHAPIRO: I PAID OFF MY STUDENT DEBT–I DON’T THINK IT’S MY RESPONSIBILITY TO PICK UP SOMEBODY ELSE’S STUDENT DEBT. I PARTICULARLY DON’T THINK IT’S SOMEBODY’S RESPONSIBILITY WHO NEVER WENT TO COLLEGE TO PICK UP SOMEBODY ELSE’S STUDENT DEBT.

LONGWORTH: TO FORGIVE OR NOT TO FORGIVE–THAT’S FOR YOU TO DECIDE.

BEFORE YOU DO, HERE’S THE QUESTION THAT NEEDS TO BE ANSWERED. WHERE WOULD ALL THIS MONEY COME FROM? AND HOW MUCH MONEY ARE WE REALLY TALKING ABOUT?

SO, LET’S START HERE, WITH WHO HAS THE POWER TO ACTUALLY CANCEL STUDENT DEBT?

CONGRESS DEFINITELY HAS THE POWER, BUT LAWMAKERS HAVEN’T BEEN ABLE TO COME TOGETHER ON IT.

SO, PRESIDENT BIDEN IS CONSIDERING AN EXECUTIVE ORDER, BUT HE’S STILL LOOKING FOR CLARIFICATION ON WHAT HE HAS THE POWER TO DO.

OTHER DEMOCRATS, LIKE SENATORS WARREN AND SANDERS, ARE CALLING ON THE EDUCATION SECRETARY TO DO IT USING THE POWERS HE HAS IN THE HIGHER EDUCATION ACT.

NO MATTER WHO DOES IT, THIS DEBT FORGIVENESS WOULD BE FOR FEDERALLY-BACKED LOANS WHICH MAKE UP THE MAJORITY OF THEM –

A WHOPPING 92 PERCENT.

SO NOW, WHILE THE MOST PROGRESSIVE LAWMAKERS WANT TO WIPE OUT ALL THE FEDERAL DEBT NATIONWIDE…

IN REALITY, ONLY A PORTION OF IT IS BEING SERIOUSLY CONSIDERED.

CERTAIN NUMBERS ARE BEING KICKED AROUND…

BIDEN’S PROPOSING 10-THOUSAND-DOLLAR FORGIVENESS FOR 15 MILLION PEOPLE.

BIDEN: I’M GOING TO MAKE SURE EVERYONE—10,000—OUT OF THIS GOD-AWFUL PANDEMIC.

LONGWORTH: FOR CONGRESSIONAL DEMOCRATS, A BILL THAT WOULD FORGIVE 50 THOUSAND DOLLARS FOR 36 MILLION PEOPLE–PROPOSED BY SENATORS WARREN AND SANDERS–IS THE MOST POPULAR.

THAT WOULD COST TAXPAYERS ABOUT $85 BILLION, ACCORDING TO MOODY’S INVESTORS SERVICE–A RISK ASSESSMENT FIRM.

MEANWHILE, MANY REPUBLICANS—LIKE RICK SCOTT—SAY THE COST OF HIGHER EDUCATION IS THE REAL PROBLEM THAT NEEDS TO BE ADDRESSED.

RICK SCOTT: I’M WORKING ON A SERIES OF BILLS RIGHT NOW THAT I’LL BE FILING SOON IN THE U.S. SENATE TO DRIVE DOWN COSTS AND ENSURE STUDENTS ARE PREPARED TO GET JOBS.

BUT WHAT IF DEMS DO GET THEIR WAY? WHO WOULD QUALIFY?

BIDEN WANTS TO INCLUDE EVERYONE MAKING 125,000 DOLLARS OR LESS A YEAR.

AND WARREN SAYS, FOR EVERYONE MAKING LESS THAN 100K,

50 THOUSAND DOLLARS OF DEBT SHOULD BE CANCELLED.

IF YOU MAKE MORE THAN THAT–UP TO 250K—SHE STILL WANTS TO SEE A SUBSTANTIAL AMOUNT FORGIVEN.

ALSO, ANYONE WHO HAS DEFAULTED ON THEIR LOANS WOULD QUALIFY.

BUT, WE’RE ONLY TALKING UNDERGRAD HERE–GRADUATE LOANS AREN’T INCLUDED.

SO WHERE DOES THE MONEY COME FROM?

CRISTIAN DERITIS–AN ECONOMIST WITH MOODY’S–HAS AN ANSWER.

CRISTIAN DERITIS: DEFICITS…JUST LIKE HOW WE PAY FOR EVERYTHING ELSE, RIGHT?

 

OR, CONGRESS COULD SPEND LESS ON OTHER PROJECTS, OR RAISE TAXES.

BUT EVEN STUDENTS LIKE JANICE COMER–WHO WOULD BENEFIT FROM THE DEBT RELIEF–WORRY ABOUT THE ULTIMATE COST.

 

COMER: YES, IT’D BE GREAT. AND YES, I THINK WOULD DEFINITELY PROPEL THE ECONOMY.

LONGWORTH: WELL, THERE IS SOME GOOD NEWS HERE.

BECAUSE SHE’S RIGHT.

MOODY’S FOUND THAT PEOPLE WOULD SPEND MUCH OF THAT MONEY, AND IT WOULD ACT LIKE A SMALL STIMULUS.

DERITIS: CERTAINLY, PEOPLE WHO HAVE LARGE DEBT AMOUNTS IN PARTICULAR, RIGHT, THAT’S GOING TO REMOVE AN OBLIGATION THAT CAN THEN FREE UP ROOM ON YOUR ON YOUR BUDGET TO MAYBE START A BUSINESS, BUY A HOME, BUY A CAR, RIGHT?

LONGWORTH: AND, ACTUALLY, THE GOVERNMENT HAS ALREADY STARTED FORGIVING SOME STUDENT DEBT.

PRESIDENT BIDEN’S WIPED OUT 2.3 BILLION DOLLARS’ WORTH OF LOANS FOR STUDENTS WITH DISABILITIES…AND FOR STUDENTS WHOSE SCHOOLS CLOSED SUDDENLY OR WERE A SCAM.

ON TOP OF THAT, BORROWERS ARE ALREADY SAVING MONEY

BECAUSE PRESIDENT TRUMP CANCELLED INTEREST ON ALL FEDERAL STUDENT LOANS DUE TO COVID FINANCIAL CONCERNS.

AND BIDEN EXTENDED THAT PROGRAM UNTIL AT LEAST SEPTEMBER 2021.

ALL THAT INTEREST IS SIGNIFICANT–

DERITIS: WE’RE TALKING ONE A HALF TRILLION DOLLARS OF DEBT 5% INTEREST RATE PER YEAR ON AVERAGE. THAT’S, YOU KNOW, WE’RE TALKING BILLIONS OF DOLLARS HERE.

LONGWORTH: SO WHERE DO YOU STAND? IS CANCELLING STUDENT DEBT A GOOD INVESTMENT OR A WASTE OF TAXPAYER MONEY? LET ME KNOW IN THE COMMENTS BELOW AND DON’T FORGET TO HIT THAT BIAS METER!


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