White farmers: The 2018 Farm Acts $428 billion over five years doesnt include the $9.7 billion in pandemic relief funds, nearly 97 percent of which went to white farmers or the 99 percent of the trade war billions that went to white farmers. More than half of all borrowers have roughly $20,000 or less in student loans, and only 7%, or about 3 million borrowers, owe $100,000 or more, according to a recent Wells Fargoreport. In fact, she said it couldn't be any clearer that Congress gave the secretary the authority to waive or modify student loan requirements. The top 10 arguments against student debt relief (and why they're wrong) Resuming payments in the current economic environment ofhigh inflationand elevated interest rates could mean many borrowers, especially those with a high debt burden, will face apayment shockwhen they have to start repaying their loans in October, according to areportby digital personal finance company Achieve. What are they gonna do, award the contracts to someone else? But standing in their way of getting to the merits of that program is a big hurdle. Chief Justice John Roberts voted against the student loan forgiveness plan and delivered the majority opinion, saying that U.S. Education Secretary Miguel Cardona has the authority to "waive or . The justices heard arguments today in high-stakes cases over the legality of President Biden's student loan forgiveness plan. It gets transferred to the national debt and becomes a liability for taxpayers rather than borrowers. The Biden administrations landmark student loan forgiveness plan has sparked a furious debate on both sides of the issue. Everyone knows that the most frivolous, irresponsible people are the ones who dedicate years of their lives to educating themselves with no reward except future financial stability. The Buffett Rule (pdf)closing tax loopholes by requiring billionaires to pay at least 30 percent in taxeswould actually lower the statutory tax rate and bring in $72 billion over 10 years, according to Americans for Tax Fairness. 1: SDC is a regressive policy Student loan debt is a marker of privilege among college-educated households. (And no matter how our work is funded, we have strict guidelines on editorial independence.) Student loan forgiveness is the wrong way to kick off the Biden administration: it is regressive and unfair, wont stimulate the economy, and creates perverse incentives to borrow more in the future. 6:40 Will your student loan debt be forgiven? In 2021, 92.6 percent of fortune 500 CEOs were white. Theres no such thing as a government handout.. Also, most student debt forgiveness plans dont just wipe out student debt; they use government funds to reimburse the lenders in some form. The reaction from Bidens opponents has been to call forgiveness unfair, both to those who didnt attend college and to those who already paid off their loans. An analysis by Goldman Sachs economists found that the impact of forgiveness on inflation is likely to be offset by most borrowers resuming payments when the student loan pause ends in January. Student debt forgiveness is a backwards-looking policy: it does not concern the new student loans that the federal government issues every semester. Yet people like Decosimo genuinely believe that financial hardship is a result of choices because their privilege wont allow them to believe that intergenerational economic mobility is a result of race, privilege and people like David Decosimo not giving a. Plus, Black people would benefit more from debt forgiveness, and, as someone once told me: Democrats want to inflict their policies on Republicans. Killing machines: Lowering the proposed $773 billion defense budget conjures up images of brave soldiers wearing Wrangler jeans fighting with muskets and pocketknives. MORE STUDENTS TURNING TO FEDERAL AND PRIVATE STUDENT LOANS TO FINANCE COLLEGE: SURVEY. The way to beat a partisan Supreme Court is to hold a grudge against it for a really long time. More perniciously, it gives colleges another reason to hike tuition. And the Department of Educationrecently announced that borrowers could expect to resume payments on student loans in October, with interest resuming on these loans in September. But the outright fury of the response in some quarters, and the. If households freed from the burdens of their debts spend more money, it could drive inflation higher meaning that the consequences of loan forgiveness would be borne by everyone, and soon. Who Really Benefits From Student-Loan Forgiveness? Courtney Norris, Saher Khan I am not in favor of framing student-loan policy as a lever for managing inflation, Sue Dynarski, a Harvard professor, an expert on higher education finance, and a former forgiveness skeptic, wrote in the New York Times on Tuesday. Instead of the statutory 21 percent tax rate, the Fortune 500 paid an effective tax rate of 11.3 percent, meaning we lost $74 billion in revenue. The post The top 10 arguments against student debt relief (and why theyre wrong) appeared first on TheGrio. The following are the five most common arguments against student debt forgiveness, and why they are all wrong: 1. The concept of Christianity is unfair to all those scapegoats that were sacrificed before Jesus died on the cross. First published on Fri 30 Jun 2023 10.37 EDT. But we should also recognize that for some people, college is a net-positive investment. Of course, these talking points are usually riddled with logic-deficient holes, but just for fun, lets look at the most common arguments from people opposed to student debt relief and see why theyre almost all wrong. The Arguments Against Student Debt Forgiveness, Explained Supreme Court challenges to Biden student loan plan - CNBC Visit Credible to speak with an expert and get your questions answered. John Yang is the anchor of PBS News Weekend and a correspondent for the PBS NewsHour. Without this program, when will the crunch come for these borrowers? With consumer prices up 8.5 percent over a year ago, some economists now argue that debt cancellation is too big a risk. Market data provided byFactset. To be fair, this isnt the only way these colleges are paying their debts. But there is currently no federal plan to actually make college cheaper for students, to reduce borrowing, or to hold colleges accountable for whether students can pay off their loans. But even assuming Congress goes along, a serious policy to substantially restrict new student borrowing is hard to imagine. You can also contribute via. While those who have been crippled by student debt are celebrating like its student loan Mardi Gras, people who dont care about the crippling effects of student debt have offered a number of talking points to undermine the logic of debt relief. Heres Plan B. Bidens big new student loan forgiveness plan, explained, How an LGBTQ clinic in Uganda keeps going amid rising homophobic violence, The USs controversial decision to send cluster munitions toUkraine, explained. It has to do with something called the major questions doctrine. The "supercharged" demand from the $900 billion stimulus package and the American Rescue Plan was "superdupercharged" due to the sanctions and resulting high oil prices following Russia's invasion of Ukraine, meaning the economy "no longer needs stimulus in fact, it needs to restrain demand." A prominent argument against student debt for the next eight years was that it was slowing down the economy: Young adults burdened by debt were being held back from buying homes, starting businesses, and spending money. The Supreme Court has heard arguments both for and against President Biden's controversial student loan forgiveness plan, which, if allowed to proceed, would absolve borrowers of up to $20,000 in federal debt if they earn less than $125,000 a year. Now do the same for corporations who avoid paying taxes. Is there someplace where they stick a needle in 18-year-old high school graduates heads and infuse them with the ability to repair air conditions or rebuild alternators? But even leaving legal questions aside, there are several reasons to oppose mass student loan forgiveness on pure policy grounds. But even if keeping payments on pause were not an option, the stimulative effect of debt forgiveness would be less than advocates hope. But for the past two years, the moratorium was extended multiple times, leading to an unusual situation: tens of millions of people owed student debt but didnt have to make any payments. But you could lower your monthly payments by refinancing to a lower interest rate. Studies show that when white people attend college, they become more progressive. Recap: Supreme Court Conservatives skeptical of Biden loan forgiveness This means we could erase all the student debt that exists in 20 years using only the lost revenue of the 500 biggest corporations. Support cancelling [sic] student loan debt if you like but dont claim for a second to be progressive, for the poor, on the side of workers, lol, he said whitely, while probably hog tying a woman to railroad tracks. To truly extinguish the perverse incentives student loan cancelation creates, policymakers will have to bring new federal borrowing to zero. We get to choose what to do with it. November 16, 2022 2:14 PM EST. "Or the Administration could attempt to create a whole new program based on targeting relief for specific types of borrowers," Ochoa continued. This attitude is in line with how policymakers in the United States have typically viewed higher education. Even if we broke the payments down equally (anyone with a student loan payment knows this is wishful thinking), we dont have to have a national bake sale. Student loan forgiveness: What to do with your debt now that the Which is where the other part of the critiques come in. Forgiveness could be life-changing for millions of people, especially those struggling with default, the argument goes, while hurting no one. FAQ - New Privacy Policy, Borrowers counting on student loan forgiveness got bad news after the Supreme Court said Biden's plan was unlawful. Well, the student debt crisis is the coronavirus. Nearly a third of all student debt is held by the top 20% of earners, for example. According to the Department of Education, Black college graduates have nearly twice as much student loan debt as the typical white grad. Why do people believe learning a trade is free? No one is saying we take this problem instead of those problems. It is the legal right to actually sue and hear. Forgiving loans will relieve borrowers of the obligation to make monthly payments, allowing them to spend that money on other things, or so the logic goes. John Yang has more on the days argument. Annie Lowrey: Joe Biden has just erased the student-loan debt of roughly 20 million people, and decreased monthly payments by an average of $250 for borrowers who will still have a balance on. Listen live: Supreme Court hears oral arguments on student loan Government resources are scarce, so there is a finite amount of relief that Uncle Sam can distribute, through student loan forgiveness or otherwise. 0 min. The six states Nebraska, Missouri, Arkansas, Iowa, Kansas and South Carolina argue in their brief that the Biden administration has overstepped its authority by moving to cancel up to $20,000. ", Proponents of canceling student debt say it would help relieve the financial burden on lower-income students who sought higher education. Congress controls government spending, they argue, and. Most news outlets make their money through advertising or subscriptions. Here are some of the key points on either side of this contentious debate: Forgiving student debt would be a "great gift" to graduates,argues the Boston Herald editorial board but so would having your "mortgages, car loans, and credit card debt" forgiven. Is student loan forgiveness fair? What to do if youre worried about forever chemicals in your drinking water, Sign up for the One holds that forgiveness is unfair to those who borrowed but paid off their debts an argument that could be raised against any social program on behalf of those who were born too early to benefit from it. "The Biden Administration could expand current forgiveness programs, like PSLF or Teacher Loan Forgiveness, to include more qualifying professions or extent the amount forgiven," said attorney Omar Ochoa. Legal Statement. HOMEBUYERS ARE FINDING BETTER DEALS IN THESE CITIES, SURVEY SAYS. Here are three key arguments - for and against the wisdom of Biden's decision. Please check your inbox to confirm. Saher Khan Leave your feedback Transcript Audio The fate of student debt relief promised for some 40 million Americans is in the hands of the Supreme Court. And one of the reasons why it really wasn't the most salient route for the administration is because it really undermines the idea that this is for an emergency, for a national emergency, and this is to prevent any kind of fallout from that national emergency. The fate of student debt relief promised for some 40 million Americans is in the hands of the Supreme Court. "For those households, the struggle will be real and unfamiliar after more than three years of not having to make payments. How about those socialist PPP loans? Many public colleges also issue tax-free municipal bonds through state and local governments that allow investors to earn untaxed profit from publicly funded colleges. "If education costs remained in line with inflation, that number would be around $12,000 per year" today instead of the $29,033 it actually cost in 2020-21. One thing virtually all sides of the debate agree on is that one-time forgiveness is not enough. The Voting Rights Act was unfair to all the Black people who endured racial terrorism and election violence to vote in elections prior to 1965. Also, we cant forget that freeing up peoples debt obligations means they have a higher taxable income, which means the government makes more money. Tristan Wilds Talks Swagger, The Wire, & D'Angelo on That's So Random, Small Town Horror Story: The Prison Inmate Eaten Alive By Insects, National Center for Education Statistics reports, Supplemental Nutrition Assistance Program. But stimulus is only justifiable while the economy is operating below its potential. Historically, U.S. economic policy has always been a massive transfer of wealth from Black people to white people. Washington The Supreme Court will hear a second challenge to President Biden's student loan forgiveness program, it said Monday . Read more opinions on theGrio. (The current rate on an undergraduate student loan is just under 5 percent, compared to up to 14 percent from a private lender.). In 2012, the unemployment rate for bachelors degree holders was around 4.5 percent, and nearly 8 percent for college dropouts and those with two-year degrees. Out of 255 million adult Americans, just 45 million have federal student debt. While the White House estimates that the current proposal will cost $240. Nor does student loan forgiveness necessarily help students with low-income backgrounds. Perhaps we use the lost revenue from the companies ranked 501-1,000. TheDepartment of Education adjusted the terms of the Revised Pay As You Earn (REPAYE) plan to 225% from 150%, which would allow borrowers to earn more before they begin repaying their student loan debt. But the financial cost of pursuing the American dream also comes with a lifetime of debt. Student Loan Forgiveness. Plus, everyone knows that wealth is the truest, most accurate reflection of a persons responsibility, which must be the only reason higher-income people pay off their loans. The most straightforward argument against mass loan forgiveness is that its benefits are skewed towards the rich. We should adhere to the principles of the conservatives who bellow endlessly about the free market and force these companies to give us a discount. To be fair, the regressivity problem is one which some advocates of loan forgiveness recognize. But in the days since the policy was announced, it has also led to pushback, debate, and controversy arguments that are likely to be studied for months and adjudicated by researchers for years, if not decades. Here's what to know. Please also read our Privacy Notice and Terms of Use, which became effective December 20, 2019. Michael Harriot is a writer, cultural critic and championship-level Spades player. A look inside the legal battle to stop Biden's student loan relief - NPR Headrights were, too. How did each Supreme Court justice vote in today's student loan It inspired many of the same debates that loan forgiveness has provoked should college be subsidized for everyone, and if so, by how much? Student debt relief is no different from Social Security or any other iteration of the government safety net. But people who owed more than Biden could forgive, or who earned too much to qualify for forgiveness, will have to resume making payments after two years of not doing so, meaning theyll actually have less money to spend on everything else. Supreme Court Strikes Down Biden's Student Loan Forgiveness - Forbes And the government argues that it's waived and modified the requirements around student loans, and the secretary did both here. Every major financial institution has been sued for discriminating against Black borrowers who partly pay the taxes that fund the FDIC and bail out banks. The controversial debt-relief . It's not unfair that they're finally taking care of the problem.". Remember what we said about white farmers receiving government handouts? Legal Statement. Justice Kagan said that the act that the department used to promulgate this program is very clear. And I just wonder, given the posture of the case and given our historic concern about the separation of powers, that you would recognize at least that this is a case that presents extraordinarily serious, important issues about the role of Congress and about the role that we should exercise in scrutinizing that? Maybe it just sagslike a heavy load.Until someone forgives it For most Americans not named Ivanka and those who cant finagle their way into a Division I rowing scholarship, education is the likeliest path to financial stability. Why economists are fighting over whether canceling debt is a good idea. If you hold private student loans, you could lower your monthly payments by refinancing to a lower interest rate. Senate Minority Leader Mitch McConnell, who would have perhaps the most to gain from a political backlash to the program, called the idea a slap in the face to every family who sacrificed to save for college, every graduate who paid their debt, and every American who chose a certain career path or volunteered to serve in our Armed Forces in order to avoid taking on debt.. But the criticism has also extended to some economists who have served in previous Democratic administrations or consider themselves sympathetic to Bidens goals. And a measly $20,000 doesnt help people who owe hundreds of thousands. The scope of Bidens student debt forgiveness plan might seem radical. Here are 5 reasons not to cancel student loans: 1. A year earlier, the number was 58 percent. Certainly, after today's arguments, lots of folks who are watching this don't necessarily take that optimistic a view. But the bulk of federal financial aid to students comes in the form of loans. March 2, 2023 The Supreme Court has heard arguments both for and against President Biden's controversial student loan forgiveness plan, which, if allowed to proceed, would absolve. Republicans were once opposed to socialized healthcare and mandates against private insurers but now they support it because they like it. Thats not for lack of ideas or for lack of trying. The Senate recently passed Republican-sponsoredlegislation proposing to revoke Biden's cancelation plan and prevent the U.S. Department of Education from canceling student loans. Furman estimated that the loan forgiveness plan, even with the resumption of payments for most borrowers in January, could drive up inflation by 0.2 to 0.3 percentage points, compared to the alternative of resuming payments for everyone at their existing debt loads. Subscribe to Here's the Deal, our politics newsletter. Student Loan Forgiveness: What Advocates (and Opponents) Say | Money This is correct. The plan would cancel up to $10,000 in federal loans per borrower making less than $125,000 a year (couples making less than $250,000) and up to $20,000 per borrower for those who used Pell Grants in college, eliminatingabout $441 billion in outstanding student debt. https://www.pbs.org/newshour/show/breaking-down-the-arguments-as-supreme-court-hears-challenge-to-student-loan-relief-plan, LISTEN: Supreme Court seems poised to sink Bidens student debt relief plan, White House proposes student loan safety net amid debt forgiveness legal battle, WATCH: Student debt relief is in legal limbo, but advocates still have a toolbox of solutions, BLM foundation starts student debt fund as federal loan program delayed. You dont have to drive 20 miles to the grocery store because your city taxes are used to plan and maintain commercial districts. Rich parents can transfer wealth to their children without consequence, while poor parents have to borrow their tax money to pay their kids college tuition. Top Republicans are gearing up to investigate the Hunter Biden case. Many student debtors are no longer young adults starting at a four-year college; theyre older and more likely to attend a community college or for-profit program. This creates an incentive to borrow more in order to take advantage of that future jubilee. That's right. People make payments on their loans over time, so loan forgiveness distributes benefits to borrowers over a period of many years. We cant solve the skyrocketing costs of college tuition by ignoring debt and asking others to pay the debt of those who are financially irresponsible. Once payments resume, Wells Fargo estimated that the typical student-loan payment would be between $210 and $314 a month. There are other versions of the fairness argument circulating. Daniela Mrabti, Digital Director, Alliance For Youth Action: I have upwards of $80,000 of student debt. Students, teachers, and activists gathered outside the court highlighting their struggles and demanding debt relief. Roughly 45 million Americans collectively owe $1.7 trillion in student debt. John Roberts, Chief Justice of the U.S. Supreme Court: The case reminds me of the one we had a few years ago under a different administration where the administration tried, acting on its own, to cancel the dreamers program, and we blocked that effort. In addition, forgiven student debt does not simply vanish. Both cases challenged the President's ability to forgive student loan debt under emergency authority from the Higher Education Relief Opportunities for Students (HEROES) Act passed in 2003. At the end of February, the justices heardoral argumentson two cases that sought to stop Biden's forgiveness plan. But by leaving the ultimate structure of how American higher education is paid for unchanged, its actually a less dramatic departure than any of the alternatives. Student debt forgiveness wouldnt prevent banks from lending money to students and most plans limit the amount that would be forgiven. Undoubtedly, student debt is a big burden for a lot of. The lawsuits argued the Biden Administration overstepped its authority through the loan forgiveness program, which would forgive $10,000 in federal student debt for borrowers earning less than . Student loan forgiveness Supreme Court hearing: Top takeaways - The Hill All rights reserved. Credible is solely responsible for the services it provides. In fact, most Black borrowers still owe 95 percent of their student loan 20 years after starting college, compared to 6 percent of white borrowers. If student debt forgiveness drives inflation slightly higher, is that worth it? Saher Khan. Vox is here to help everyone understand the complex issues shaping the world not just the people who can afford to pay for a subscription. And it is always hard to predict, but my sense after the questioning was that there may be five conservative justices who, looking at the merits of the case, would not uphold the student loan forgiveness program. At the end of February, the justices heard oral arguments on two cases that sought to stop Biden's forgiveness plan. What do we do with the revenue? You know what else is a massive transfer of wealth? Arguments Against Student Loan Forgiveness Opponents of student loan cancellation argue that widespread forgiveness would provide little economic boost relative to the projected cost while doing nothing to address the underlying drivers of the growth in student debt, namely soaring tuition costs that have outpaced the growth of median wages. Your car insurance rate partly reflects the rate of car accidents and claims caused by bad roads. The most likely path to bypass the ruling and still get federal loans forgiven would be an appeal to Congress. There are many people struggling to repay their student loans who deserve some help from the government that offered them those loans in the first place. The estimated $1.6 trillion in unpaid student loans has created a grassroots progressive movement focused on student debt forgiveness. Will you support Voxs explanatory journalism? In other words, people who can afford their student loans should pay their student loans. Eliminating food subsidies for poor families SNAP, as the food stamp program is known today would definitely slow the economy, but that doesnt mean we should do it.. The student loan pause was always supposed to end eventually, and it will in January.
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