Biden will cancel up to $20,000 in student loan debt for certain Pell Grant recipients

[Highmark]

Buying votes.   Nothing more...nothing less.  Could cost taxpayers $300,000,000,000.  

https://www.foxnews.com/politics/biden-announces-student-loan-handout-national-debt-soars

College grads earn 2-3 times more over their lifetime yet we are handing them money at the partial expense to those that never went.

Colleges will just increase their cost.

Shameful.   Hopefully this is taken to court and found unconstitutional. 

Edited August 24, 2022 by Highmark

[Anler]

Its just a bank bail out disguised as college debt relief. My son just started college I need to get on this! LOL

[Highmark]

Our only hope.

The Antideficiency Act (ADA) (Pub.L. 97–258, 96 Stat. 923) is legislation enacted by the United States Congress to prevent the incurring of obligations or the making of expenditures (outlays) in excess of amounts available in appropriations or funds. The law was initially enacted in 1884, with major amendments occurring in 1950 (64 Stat. 765) and 1982 (96 Stat. 923). It is now codified primarily at 31 U.S.C. §§ 1341–1342. The Act is also known as Section 3679 of the Revised Statutes, as amended.

The ADA prohibits the U.S. federal government from entering into a contract that is not "fully funded" because doing so would obligate the government in the absence of an appropriation adequate to the needs of the contract. Accordingly, it is often cited during U.S. government shutdowns as a reason for the closure of certain departments or facilities.

[Kivalo]

As is often pointed out this debt isn't cancelled, its just transferred to someone else to pay.

[akvanden]

This will just entice people to take more debt with the idea that the government will someday pay it off.

[soeaster]

1 hour ago, Highmark said:

Buying votes.   Nothing more...nothing less.  Could cost taxpayers $300,000,000,000.  

https://www.foxnews.com/politics/biden-announces-student-loan-handout-national-debt-soars

College grads earn 2-3 times more over their lifetime yet we are handing them money at the partial expense to those that never went.

Colleges will just increase their cost.

Shameful.   Hopefully this is taken to court and found unconstitutional. 

And college students are still signing up for these "predatory lending practices" as we speak. Why would we want to fix the root problem when we can just put a band aid on it on the back end? Disgusting.

[Rod]

More corporate welfare 

[teamgreen02]

1 hour ago, Anler said:

Its just a bank bail out disguised as college debt relief. My son just started college I need to get on this! LOL

Bank bail out?  LOL, the government is the bank!

I love that the plumber or electrician making $100k busting his ass gets to pay for some white collar worker's loans who make $125k a year.

Other than the grifters getting the loan forgiveness, voters are going to be pissed.  Plus it's going to be challenged in court and likely overturned.

[Anler]

6 minutes ago, teamgreen02 said:

Bank bail out?  LOL, the government is the bank!

I love that the plumber or electrician making $100k busting his ass gets to pay for some white collar worker's loans who make $125k a year.

Other than the grifters getting the loan forgiveness, voters are going to be pissed.  Plus it's going to be challenged in court and likely overturned.

They got college loans from the banks. Now they cant or wont get jobs and cant pay the loans so yeah, its a bank bail out. 

[teamgreen02]

Payments capped at 5% of monthly income.  

What a boondoggle.  Who could have guessed the federal government taking over the student loan industry would turn it into a complete disaster?

[teamgreen02]

1 minute ago, Anler said:

They got college loans from the banks. Now they cant or wont get jobs and cant pay the loans so yeah, its a bank bail out. 

They are all federally backed anyways.  Prior to 2010 the banks made the loans knowing that.  If the borrower doesn't pay, the federal government gives the bank 97% of the principle.  Heads they win, tails we lose.

Now, all the loans are direct through the federal government where the "bank" is just a servicer of the loan.

Quote

What Is a Federally Guaranteed Student Loan?
The federally guaranteed student loan program ended June 30, 2010. But many people are still paying on guaranteed loans issued before then.
Many former students have federally guaranteed student loans. These loans are different from private student loans that the government doesn't guarantee, and from loans issued directly to the student by the federal government (direct loans). As of June 30, 2010, Congress stopped the guaranteed student loan program for newly issued loans. But many people are still paying on their federally guaranteed student loans that were issued before June 30, 2010, so they'll be around for a while.

The American Rescue Plan Act of 2021, which President Joe Biden signed into law on March 11, 2021, includes a provision exempting all student loan forgiveness after December 31, 2020, and before January 1, 2026, from federal taxation.

Federal laws generally treat any forgiven student loan debt as a taxable event for the borrower unless they were forgiven for specific reasons, like the death or disability of the borrower (through 2025). The American Rescue Plan Act makes student debt forgiveness tax-free until January 1, 2026. The tax exemption under this law applies to direct federal student loans, Federal Family Education Loans (FFELs), and private student loans.

The Guaranteed Student Loan Program (FFELs)
Under the guaranteed student loan program, private lenders like Sallie Mae and commercial banks issued student loans that the federal government guaranteed. Guaranteed loans are also called Federal Family Education Loans (FFELs).

Here's how the "guarantee" works: If a borrower defaults on a guaranteed loan, the federal government pays the bank and takes over the loan. The federal government pays approximately 97% of the principal balance to the lender. At that point, the federal government owns the loan and the right to collect payments on the loan.

Guaranty Agencies
When the federal government takes over a defaulted FFEL, it uses a "guarantee agency" to do the work of servicing the loan. Guaranty agencies are nonprofit groups that contract with the federal government. They are essentially middlemen between the private lender and the federal government. The guarantee agency will pay the bank for the defaulted loan, and the federal government then reimburses the guarantee agency. The guarantee agency then attempts to collect on the loan.

There are many existing guarantee agencies, all assigned to different states. You can find a list of the guarantee agencies and their state assignments at www.finaid.org.

The End of the Federally Guaranteed Student Loan Program
Responding to arguments that the FFEL program was more costly to the government than direct loans, Congress ended the FFEL program effective June 30, 2010.

Although schools no longer offer guaranteed student loans, the guaranteed student loan system will be in place for many years to come. That's because millions of borrowers still owe money on FFEL guaranteed loans. The guarantee agencies will continue to pay banks for defaulted FFELs and pursue collection on those loans until the last FFEL is paid off.

The Direct Student Loan Program
Prior to June 30, 2010, lenders issued federal student loans either as guaranteed student loans or as "direct" student loans. Direct loans are issued directly by the federal government. Whether you received guaranteed or direct loans depended on which loan program your school signed up for.

After June 30, 2010, you can only get a federal student loan under the direct student loan program. A direct loan is made directly from the federal government to students. The federal government contracts with loan servicers to handle day-to-day loan management.

 

[Anler]

Just now, teamgreen02 said:

They are all federally backed anyways.  Prior to 2010 the banks made the loans knowing that.  If the borrower doesn't pay, the federal government gives the bank 97% of the principle.  Heads they win, tails we lose.

Now, all the loans are direct through the federal government where the "bank" is just a servicer of the loan.

 

Either way its a bail out

[Ez ryder]

1 hour ago, teamgreen02 said:

Payments capped at 5% of monthly income.  

What a boondoggle.  Who could have guessed the federal government taking over the student loan industry would turn it into a complete disaster?

Oh no the givenment runs everything well . Just ask here how many trust them to run the health insurance industry.  

 

[1jkw]

It's bullshit, will cost more votes than it will buy IMO.

[Highmark]

Pell grant students already qualified for almost $28K in free college.   Heck lets give them $20K more. 

You and your wife now earn $249,000 a year.   No problem we'll give you another $20K.    

Edited August 24, 2022 by Highmark

[Bontz]

4 minutes ago, 1jkw said:

It's bullshit, will cost more votes than it will buy IMO.

I hope you're right & this backfires on the Dems immensely come November.

[Highmark]

Typical dem plan....spending vs. controlling costs.   With the amount of tax dollars and the little that actually goes to instruction, the cost of college could be cut in half or more.

The fact that endowment funds cannot be used for tuition reduction is fucking stupid.   Almost 3/4 of a trillion dollars sitting in them and yet the govt is handing out more. FUBAR.

https://nces.ed.gov/fastfacts/display.asp?id=73

Probably over 50 colleges with endowments over a billion dollars.   

Edited August 24, 2022 by Highmark

[spin_dry]

4 hours ago, Highmark said:

Buying votes.   Nothing more...nothing less.  Could cost taxpayers $300,000,000,000.  

https://www.foxnews.com/politics/biden-announces-student-loan-handout-national-debt-soars

College grads earn 2-3 times more over their lifetime yet we are handing them money at the partial expense to those that never went.

Colleges will just increase their cost.

Shameful.   Hopefully this is taken to court and found unconstitutional. 

Buying votes.  

Who thinks that this will result in any change to the vote count? Trump sent out trillions in free money with checks signed by him-and he still lost by a landslide. Give your head a shake. 

[1jkw]

1 hour ago, Bontz said:

I hope you're right & this backfires on the Dems immensely come November.

It sure won't help them.

[Crnr2Crnr]

on the bright side, if there is one is that Biden walked it down from 50 or 60k to 10k

I still don't agree with it, but it could have been even worse

[Crnr2Crnr]

33 minutes ago, spin_dry said:

Buying votes.  

Who thinks that this will result in any change to the vote count? Trump sent out trillions in free money with checks signed by him-and he still lost by a landslide. Give your head a shake. 

target age of recipients is late twenties to mid thirties... so yes, it's Dems trying to buy millennials votes 

[Crnr2Crnr]

1 hour ago, Highmark said:

Typical dem plan....spending vs. controlling costs.   With the amount of tax dollars and the little that actually goes to instruction, the cost of college could be cut in half or more.

The fact that endowment funds cannot be used for tuition reduction is fucking stupid.   Almost 3/4 of a trillion dollars sitting in them and yet the govt is handing out more. FUBAR.

https://nces.ed.gov/fastfacts/display.asp?id=73

Probably over 50 colleges with endowments over a billion dollars.   

that's what chafes my ass... all this time and effort spent and NO/NONE/Zero,Zilch discussion about making public universities more affordable or making student loans reasonable.  

when they (D's & R's) can't solve a problem they just throw our money at it, rather than figuring out the root of the problem.  

we deserve the elected officials we have... because we don't demand accountability from them, as their employers.

Edited August 24, 2022 by Crnr2Crnr

[Angry ginger]

14 minutes ago, Crnr2Crnr said:

that's what chafes my ass... all this time and effort spent and NO/NONE/Zero,Zilch discussion about making public universities more affordable or making student loans reasonable.  

when they (D's & R's) can't solve a problem they just throw our money at it, rather than figuring out the root of the problem.  

we deserve the elected officials we have... because we don't demand accountability from them, as their employers.

actually there is some lip service int he release about that.  

[DriftBusta]

21 minutes ago, Angry ginger said:

actually there is some lip service int he release about that.  

They should make these college and universities start to give back some of the hundreds of billions of dollars in endowments that they all hold, apparently tax free.  Let them pay the tab for all their excess and the troubles that its causing.

[Mainecat]

This savings goes directly back into the economy right?