#Biden pauses student loans free#

In January, inflation surged to 7.5 percent, the highest it has been in 40 years. The federal government is flooding the economy with so much money (via handouts, subsidies or payment pauses) that demand is growing too fast for production to keep up. The results of these policies are clear. In 2021, the United States’ interest payments cost roughly $2,600 per household. interest costs will triple within the next decade - from $331 billion this year to $910 billion in 2031, accounting for 12% of the entire federal budget. spent $6.82 trillion, or 30% of the economy. This is just one example of high federal spending. In 2020, the U.S. Every month, the moratorium costs the government $4 to $5 billion. The moratorium is also contributing to high levels of government spending that exacerbates inflation and disproportionately harms low-income Americans.Īs of January, the moratorium has cost the federal government more than $100 billion. In fact, this “issue” is hardly a low-income one at all: the median income of households making active payments on their student loans was $76,400, with just 4 percent of these households being below the federal poverty line. About 75 percent of student loan repayments come from the top 40 percent of earners, as the Committee for a Responsible Federal Budget notes. The Brookings Institution described those who would benefit most from student debt forgiveness as “higher income, better educated, and more likely to be white.” The top 20 percent of households currently hold $3 in student loan debt for every $1 of debt held by the bottom 20 percent of earners. This policy primarily benefits the wealthy. All these sacrifices were made by people who could only work with the information they had: if they took out loans, they would be held to their contractual obligations.ĭespite Democrat talking points, the moratorium isn’t helping low-income Americans hit hard by the pandemic. This policy is also unfair to those who were proactive in paying off their debt.

#Biden pauses student loans free#

It is unfair to Americans that decided against attending college, opted for less expensive schooling, served in the military to receive free education, or have worked long hours to put themselves through school instead of going into debt.

It is unfair to the millions of Americans that were responsible and did not rack up tens of thousands of dollars of debt. On the most basic level, this policy is unfair. Instead, the administration caved to progressives who claimed that inaction would cost Democrats in the midterms. Two weeks before the announcement, White House press secretary Jen Psaki assured Americans that the loan payments would restart in February. President Biden announced in December that he would be extending the federal student loan repayment moratorium until May 1, 2022. This policy was originally implemented in March 2020 but has been extended several times far after the height of the crisis. It is also fundamentally unfair, serves affluent elites, and drives already out-of-control inflation, as one ATR op-ed in the Washington Times outlines. This policy has already cost taxpayers $100 billion and will cost an additional $5 billion each month. Americans on both sides of the aisle are looking beyond pandemic shutdowns, restrictions, and mandates. Given this reality, it’s time for the Biden Administration to resume federal student loan repayments.