Why Biden is stuck on student-debt cancellation

Yahoo! Finance ^ | 4/6/2022 | Rick Newman

[Tell It Right]

Inflation is the biggest threat to Joe Biden’s presidency. Prices are rising nearly 8% per year, and could go higher still before Federal Reserve rate hikes or other measures bring some relief to family budgets.

[Tell It Right]

Basically says:

Hey young college students and recent college students. I know ya all voted for Biden expecting him to make your dumb college decision costs go away. But it ain't happenin' cuz Biden's stuck, dontcha see? Inflation is making it difficult. It's not his fault inflation is 8% per year. Besides, this means your fat college debt ain't so fat no more -- it's all worthless money anyway. Besides, Biden's making it so you don't have to make payments for a while, so that's good, right?

[Gay State Conservative]

Buying votes...with my tax dollars.

[MercyFlush]

Biden is going to use the student loan thing in November and then, like Lucy to Charlie Brown, after the election he’ll pull it back and hold on to it until it’s useful again.

[antidemoncrat]

So 59 Congre$$ people owe about $6million in student loan debt including AOC, Talib and Omar. I wonder if they will be first in line to get theirs paid off ... of course you silly goose ... just like Congre$$ did for Obamacare ... exempted themselves.

[Prolixus]

Student loan cancellation must sound great to potential voters who do not have enough life experience to know that it’s never gonna happen.

[DesertRhino]

Hell, it’s only 1.7 trillion. And all the mortgages in America are another 10 trillion. We already owe 30 trillion (not including SS and other entitlements)

Modern Monetary Theory says we can print all we want. I say we just tack on another 12 trillion and say we owe 42 trillion and pay off ALL the college loan AND mortgages.
And I’m really a mensch, so if I get a say, we throw in another 800 billion, make it a nice round 13 trillion and give every American 2500 cash of mad money.

It’ll be a jubilee!

[blackdog]

If student loan debt is written off, how do you fund new student loans? Nobody in their right mind would fund it. How come this question is never asked?

[Iron Munro]

[jcmccorm]

The government (Federal) backs (funds) these loans right?

[V K Lee]

Do believe it was read, recently, he has quietly forgiven
government employees their student loans. The ‘common’ student comprising ‘common citizens’; they still owe for
their bills; due after the payment grace period which ends
when? August, 2022?
Slippery SloJo makes suckers of us all.

[Iron Munro]

[Marko413]

Most all the perks of loan forgiveness are for government workers so I guess that means they will be first in line to have theirs taken care of.

[fatboy]

I have been trying t figure out why the democrats want Biden to wave his magic wand of forgiveness while democrat leaders have not proposed legislation.

So my theory is, no one expects anything to get done but they want to look like they are trying. One of the problems with loan forgiveness in general is when even a portion is forgiven, that amount is considered taxable income. While it is doubtful that Biden could pass forgiveness by decree I’m really not sure he could structure it in such a way to avoid the money being taxable. I think that is the job of congress.

Congress on the other hand could throw in making the forgiven amount non-taxable. This however would be like rubbing salt in a wound, there would be many unhappy people if simple forgiveness is granted, then make it non-taxable, that is the kind of thing that starts revolutions.

If a borrower has $50k forgiven income tax would be imposed in one lump sum that tax year. The good news to those way in debt would be “your loan is forgiven”. The bad news is “you owe $1000s in taxes this year”. Owing money to the department of education is one thing, owing money to the IRS is all together different.

So i think no forgiveness for a large sum, maybe a small token amount, keep the issue alive for future election fodder.

[DesertRhino]

You nailed it.

[blackdog]

Not funding them. The funding comes from investors. The guarantees come from the government.

[blackdog]

https://en.wikipedia.org/wiki/Sallie_Mae

[IncPen]

With inflation the way it is, anyone with a fixed interest rate loan is going to be paying it back in cheaper dollars. They already are— that in itself is a form of forgiveness.

Of course, the lenders practically begged borrowers to refinance into variable loans in recent years, with the promise of lower payments… which is great, until rates go up.

It’s a very dim glimmer of hope that the coming crisis will educate a couple of generations the way the Great Depression did, but I’m not holding my breath.

[ridesthemiles]

AOC owes less than $40,000 but she bought a NEW TESLA.

[ronnie raygun]

using it till November and if its successful he will offer it only to people of color

[Sam Otto Long]

All of this talk about student loan forgiveness is amusing. I hate to mention that the IRS will consider the ‘Forgive Loan Amount’ as taxable income that will be needed to be reported on your income tax. Congratulations, you now have tax due on your ‘forgiven loan amount’ due on April 15ish. And I bet the amount due will incur penalties because you did not submit quarterly withholding. Also The IRS does not have a since of humor about money owed them. Say what you will about the IRS but they are amazingly good at collecting money. And all that is due has to be paid when due or else interest and penalties accrue unbelievably fast. It's my first post, I could not resist replying.