While Nicholas Horton, founder of Red Truck Strategies, "your trusted partner for gold standard research," can understand the situation student loan borrowers are in, he says "it's frustrating for those of us who did it the right way and worked really hard to pay off our school" to now have to help pay off other people's loans.
And as he points out, that is really only part of the equation.
"It's not just those of us who went to school and then paid it off; there's millions of people across this country that didn't even have the option to go to college," Horton notes. "They're out working as plumbers and electricians and building houses and driving trucks and doing a lot of really important work across this country, paying taxes and really scraping by right now in a period of record-high inflation, struggling to make ends meet. Now they are being told by the president that he's unilaterally transferring … wealth from people that are hardworking American taxpayers to people that made a choice to take on debt."
Shifting that responsibility onto others, he says, is "just wrong."
"There's no such thing as canceling student loan debt," Horton asserts. "That's a myth. This is a transfer of debt."
Under the plan President Joe Biden announced this week, the Department of Education will provide up to "$20,000 in debt cancellation to Pell Grant recipients with loans held by the Department of Education, and up to $10,000 in debt cancellation to non-Pell Grant recipients."
The White House "fact sheet" details that borrowers are eligible for this relief if their individual income is less than $125,000 ($250,000 for married couples). No high-income individual or high-income household – in the top 5% of incomes – will benefit from this action.
"To ensure a smooth transition to repayment and prevent unnecessary defaults, the pause on federal student loan repayment will be extended one final time through December 31, 2022," the statement notes. "Borrowers should expect to resume payment in January 2023."