Hours before the President announced his loan-forgiveness plan in person Wednesday afternoon, in a rambling story about his dad and college and Plymouths at a car dealership, the Biden administration had announced the plan calls for cancelling $10,000 of federal student loan debt for borrowers making less than $125,000 annually. The so-called forgiveness climbs to $20,000 for Pell Grant recipients.
Many student loan borrowers have been waiting to see if the U.S. Dept. of Education would continue a "pause" on repayment, an allowance that dates back to the Trump administration, and they learned Wednesday that pause will continue through the end of 2022.
AFN reported Tuesday the White House had leaked its loan forgiveness plans to The Hill, and that initial news story mirrored the Wednesday announcement.
As far as the financial impact, the nation’s student loan debt tops a whopping $1.6 trillion and affects more than 43 million Americans, according to a Fox News story. Approximately one-third of those owe less than $10,000, the story said.
The cost to taxpayers, the Fox News story said, is approximately $300 billion.
Biden’s announcement comes after House Speaker Nancy Pelosi (D-California) told reporters, almost exactly one year ago, a president doesn't have the authority to cancel those loans.
"People think that the president of the United States has the power for (student loan) debt forgiveness. He does not," Pelosi said at a press briefing in July 2021.
Biden boasted Wednesday that he is fulfilling a campaign promise, which is true, by forgiving student loan debt. That fulfilled promise comes just 12 weeks before midterm elections.
Reacting to Pelosi’s statement on American Family Radio, American Family Association's General Counsel, Abraham Hamilton III, said it was typical of Democrats to say one thing and then do another.
"They can tell you today that I will never have lunch at noon,” he remarked, “and then tonight say, ‘Tomorrow, we're having lunch at noon.'"
Asked by the show hosts about any legal recourse for people who repaid their own loans, Hamilton said that is doubtful. Even if someone else is able to be forgiven of their contract responsibility, he said, that doesn’t initiate a legal “right of action” in the courts because you met your contractual obligation.
Andrew Handel, speaking for the American Legislative Exchange Council, tells AFN that Biden’s announcement is the “ultimate disincentive” for people to pay their loans on time. He suspects many of those non-payers have been holding on to their money in the hopes they are granted “forgiveness,” and now their wishes have come true.
At his press conference, Biden was asked by Fox News correspondent Peter Doocy about the people who paid their loans but now others don’t have to.
What was Biden’s reply? He gave none. He ignored the question and ambled away from the podium.