President Biden's student loan relief plan

It will actually cancel much more student debt than advertised which is a good thing

President Biden has announced the canceling of $10,000 in student debt for many Borrowers and up to $20,000 in cancellation of student loans for some borrowers. There are a lot of other details in the plan that aren't being as widely reported that show that wood Biden has done is actually much better than many of us expected would be done. And 87 percent of the benefits of this plan will go to those at incomes lower than $75,000. This makes a complete lie of the claims that many Republicans are making about the plan that it benefits the rich. I know many of you are surprised at the hypocrisy and projection of Republicans, who are the party of the top one percent and the ultra wealthy, lying about Biden's student loan relief plan being a handout to the rich.

There are many benefits to the plan that was announced by the White House today, but there's something that we should understand about student loan payment even before we discuss what Biden did today

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Student loan borrowers who are below certain levels of income, those who graduated from college and are finding they may not be making the big money that they need to be earning to make the ultra high student loan payments, have for a couple decades now had of variety of income based repayment plans that allow them to lower them monthly loan payments based on income. Many of these borrowers who are on such repayment plans know this and perhaps there are some who are unaware of these options and have not signed up for income based repayment plans. Essentially the way these work is that borrowers submit paperwork and will pay no more than 10 percent of their discretionary income toward their loans, limiting how much money they have to pay each month. Typically, after 20 years of these payments, the remaining balance is forgiven. The amount of their monthly income that is considered discretionary is essentially the cost of living that individuals and families need to account for in their monthly budgets to pay the bills every month. So in theory borrowers have been, if they have signed up for these kinds of repayment plans, due to pay about 10 percent of their income that is left over after basic expenses.

The Biden plan announced today makes two changes in these repayment plans. The percentage of discretionary income paid per month is cut in half to 5 percent. And the level of what is defined as discretionary income is raised so that anyone who is at or below about 225 percent of poverty level will be assured of not having to pay anything more than $0 per month for their student loan payments. Should they remain below this income level for the 20 years, they might end up paying nothing back, due to lack of income, and have their balances forgiven after the 20 repayment period.

The benefits of this plan are such that 87 percent goes to those making less than $75,000 per year. The other 13 percent goes to those higher than that income level that make less than $125,000. In other words, the lie that Republicans are telling that this is socialism for the rich, is not at all true. There are no wealthy individuals that will be getting their student loans forgiven by the plan that President Biden announced today. Once again, out of partisanship or just simply relying on people to not be informed, Republicans are blatantly lying about this student loan relief program.

The program has some other provisions, including some cost controls on colleges and universities to keep them from taking advantage of the availability of student loan programs by excessively raising tuition and fees. This kind of approach has been needed for a long time because the cost of going to college has increased at a rate often three to four times the rate of inflation.

Overall this is a great plan. The end result is that tens of millions of Americans will receive relief from their student loan debts and have more money that will be put back into the economy and will go towards purchasing homes and cars and other consumer items and those purchases will create jobs and employ more people, leading to economic prosperity and some increased tax revenue as well. As Senator Elizabeth Warren and others have argued, the benefits of canceling student loans far outweigh the costs. While many wanted higher amounts of student loan debt to be canceled than these amounts announced today, as you can see, the details of the plan are going to essentially cancel most student loan debt over time. The benefits will go especially to those at the lower income levels, because those borrowers as long as they are at income levels where they can't afford to make payments on student loans will not be required to do so. In this way the plan is actually going to cancel a lot more student loan debt than the $10,000 and $20,000 amounts that were announced today. Overall this is a great plan and the American people should be enthusiastically supporting this.