By Seth Pickens
Features Editor
On Aug. 24, President Joe Biden announced his plan to help pay off federal student loan debt with $240 billion in government funding. However, the plan’s legality, price, and long-term effect on the economy are detrimental to the U.S.
College loans fall under two categories: federal and private loans. Federal loans are under the jurisdiction of the government, whereas private loans are controlled by an independent party. The vast majority of loans owed today are federal, so forgiving them would relieve most student loan debt, but place a strain on government funding.
The first major issue with the president’s plan is its legality. In the Constitution, presidents are not given legislative powers, except for the ability to veto bills. President Biden is overstepping his boundaries by disrespecting the power of Congress, which is intrinsically tied to the will of the people. The plan needs to go through the same procedure that a normal bill would so that it does not set a standard in which the President can surpass its constitutional powers.
National Economic Council Deputy Director Bharat Ramamurti says that the government’s debt relief will lead to a lack of income in the future, totaling $240 billion in missing payments over the next decade. The government needs to stabilize spending, so the money spent on student loan forgiveness must be recovered.
According to Kelly Anne Smith of Forbes magazine, satisfying the recoil of the plan will require higher taxes that will hurt the American economy and cut government funding for important social programs. Due to the student loan forgiveness plan not being treated like a bill, Congress members cannot control what programs spending would be cut from or what would be taxed.
Even though President Biden plans for student loan forgiveness to be available in October, the American people do not have data on how this will affect inflation or taxes. Currently, the people have a surprising lack of information on the long-term effects of the plan.
In addition, the systematic issues that cause crippling student loan debt are not being addressed. The White House’s “Fact Sheet” mentions better solutions, such as easing debt for people who have worked in the military, a nonprofit, or a government agency. However, these alternatives have not been planned out yet.
Some people may think that Biden’s plan is acceptable because it will relieve college graduates’ financial situation. However, according to Melanie Hansen’s 2022 research paper, “How Many People Have Student Loans,’’ there are over 40 million Americans struggling with student loan debt. The public must recognize that government funding is already helping tens of millions of Americans in poverty, but reforming that funding toward student loans could have massive ramifications.
The leaders of our nation should be making an effort to bring relief to those in student loan debt, but it should not be done in this way. The plan is too costly, risks too many long-term effects, and has legal implications.The PSAT serves as an accurate depiction of student intelligence, study guide for college exam.
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