{"id":1963845,"date":"2023-07-04T05:36:02","date_gmt":"2023-07-04T09:36:02","guid":{"rendered":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/four-problems-with-bidens-new-student-debt-relief-plan\/"},"modified":"2023-07-04T05:39:20","modified_gmt":"2023-07-04T09:39:20","slug":"four-problems-with-bidens-new-student-debt-relief-plan","status":"publish","type":"post","link":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/four-problems-with-bidens-new-student-debt-relief-plan\/","title":{"rendered":"Biden&#8217;s student debt relief plan: Four issues."},"content":{"rendered":"<aside class=\"mashsb-container mashsb-main mashsb-stretched\"><div class=\"mashsb-box\"><div class=\"mashsb-count mash-medium\" style=\"&quot;\"><div class=\"counts mashsbcount\">14<\/div><span class=\"mashsb-sharetext\">SHARES<\/span><\/div><div class=\"mashsb-buttons\"><a class=\"mashicon-facebook mash-medium mash-nomargin mashsb-noshadow\" href=\"https:\/\/www.facebook.com\/sharer.php?u=https%3A%2F%2Fwww.conservativenewsdaily.net%2Fbreaking-news%2Ffour-problems-with-bidens-new-student-debt-relief-plan%2F\" target=\"_top\" rel=\"nofollow\"><span class=\"icon\"><\/span><span class=\"text\">Facebook<\/span><\/a><a class=\"mashicon-twitter mash-medium mash-nomargin mashsb-noshadow\" href=\"https:\/\/twitter.com\/intent\/tweet?text=&amp;url=https:\/\/www.conservativenewsdaily.net\/breaking-news\/?p=1963845&amp;via=ConservNewsDly\" target=\"_top\" rel=\"nofollow\"><span class=\"icon\"><\/span><span class=\"text\">Twitter<\/span><\/a><a class=\"mashicon-subscribe mash-medium mash-nomargin mashsb-noshadow\" href=\"#\" target=\"_top\" rel=\"nofollow\"><span class=\"icon\"><\/span><span class=\"text\">Subscribe<\/span><\/a><div class=\"onoffswitch2 mash-medium mashsb-noshadow\" style=\"display:none\"><\/div><\/div>\n            <\/div>\n                <div style=\"clear:both\"><\/div><\/aside>\n            <!-- Share buttons by mashshare.net - Version: 4.0.47--><h2>Engaging Title: Biden&#8217;s New Plan for Student Loan Forgiveness: Challenges and Consequences<\/h2>\n<p>Now that the Supreme Court has left President Joe Biden\u2019s plans for sweeping student debt forgiveness in tatters, the Biden administration is plotting new ways forward for the effort.<\/p>\n<p>Some changes will take place immediately. Biden announced that student loan holders would have a one-year \u201con-ramp\u201d period, starting in October, during which they\u2019ll face no consequences for missing payments, for example.<\/p>\n<h3>Four Problems with Biden\u2019s Second Attempt at Student Loan Forgiveness<\/h3>\n<ol>\n<li><strong>Still Vulnerable to Legal Challenges<\/strong><\/li>\n<blockquote>\n<p>Just because the Biden administration is choosing a new legal basis for student debt forgiveness, that doesn\u2019t mean it will avoid the legal pitfalls that ultimately took down the last plan.<\/p>\n<p>Biden\u2019s team had used the Higher Education Relief Opportunities for Students Act to underpin the <a href=\"https:\/\/www.conservativenewsdaily.net\/breaking-news\/four-problems-with-bidens-new-student-debt-relief-plan\/\" title=\"Biden's student debt relief plan: Four issues.\">original student loan forgiveness program<\/a>. That 2003 law was written to relieve student debt burdens for soldiers serving overseas.<\/p>\n<p>The Biden administration had argued that the pandemic, which it declared over in May, provided the basis to invoke the special relief powers of the HEROES Act. But the Supreme Court disagreed.<\/p>\n<p>Now, Biden is eyeing the Higher Education Act of 1965 to give him the authority to forgive some student loans.<\/p>\n<p>That law \u201ccould be used only for a far more limited number of debt holders, and even this would raise new legal questions,\u201d wrote Jonathan Turley, a constitutional law professor at George Washington University.<\/p>\n<p>The Higher Education Act does include language giving the education secretary the ability to adjust student loans \u201cunder certain circumstances,\u201d but precisely how much he can do remains unclear.<\/p>\n<p>The use of the law for the second iteration of student loan forgiveness could still be vulnerable to the same type of legal challenges that felled the first: claims of executive overreach without a legitimate basis in statute.<\/p>\n<\/blockquote>\n<li><strong>Incentivizing Students Not to Pay<\/strong><\/li>\n<blockquote>\n<p>The Biden administration had repeatedly extended the pause on student loan repayments that began during the pandemic, meaning many Americans with student debt haven\u2019t had to make payments in years.<\/p>\n<p>That is set to change in October, when, due to the <a href=\"https:\/\/www.conservativenewsdaily.net\/breaking-news\/rand-paul-takes-a-stand-against-debt-bill-reveals-conservative-alternative-to-the-biden-mccarthy-deal\/\" title=\"Rand Paul opposes debt bill, offers conservative alternative to Biden-McCarthy deal.\">debt limit deal negotiated<\/a> by House Republicans, repayments are set to begin.<\/p>\n<p>But Biden announced that his administration would allow borrowers an \u201con-ramp\u201d year to get back into the habit of paying for their loans.<\/p>\n<p>Borrowers who miss payments will not be penalized for doing so. Their credit won\u2019t be harmed, they will not be referred to debt collectors, and the threat of default will be off the table.<\/p>\n<p>\u201cDuring this period, if you can pay your monthly bills, you should,\u201d Biden said Friday during a speech about the Supreme Court\u2019s decision.<\/p>\n<p>Without any consequences for people who don\u2019t pay their loans during the next year, however, some borrowers may not see an incentive to restart payments that they haven\u2019t had to make since the pandemic.<\/p>\n<\/blockquote>\n<li><strong>College Tuition Could Rise<\/strong><\/li>\n<blockquote>\n<p>Biden\u2019s plan also includes limiting some borrowers\u2019 payments to a certain percentage of their income.<\/p>\n<p>His administration had already set in motion the process to cap how much student loan holders were required to pay each month at 5% of their disposable income \u2014 meaning students who graduate into lower-paying jobs won\u2019t have to pay nearly as much as those who land high-salary positions after school.<\/p>\n<p>Knowing they\u2019ll never be saddled with payments they can\u2019t afford, some prospective students may borrow more than they otherwise would to go to college. And that, in turn, could inspire colleges to hike their tuition.<\/p>\n<p>The generous income-based repayment plan could have effects \u201cfor higher-income students who might otherwise cover some of the costs out-of-pocket,\u201d the non-profit organization Arnold Ventures wrote in a comment on the proposed Biden rule, as well as for \u201clower-income students who might otherwise seek to minimize their debt loads.\u201d<\/p>\n<p>\u201cFor institutions, the temptation to encourage borrowing to further pad tuition revenue may be too strong for many to resist,\u201d the group wrote.<\/p>\n<p>Biden\u2019s plan would also continue the practice of forgiving the balance of student loans after 20 years if the borrower has made payments. That means prospective students considering how big a loan to get could sign on for large debts, knowing they\u2019ll never pay more than 5% of their income toward it and that it will go away in 20 years.<\/p>\n<p>For colleges and universities, that could provide an opportunity to charge exorbitant amounts for tuition, seizing the chance to have taxpayers pick up the tab for whatever goes unpaid under the new system.<\/p>\n<\/blockquote>\n<li><strong>The Price Tag Just Went Up<\/strong><\/li>\n<blockquote>\n<p>Even though fewer people may feel debt relief under the new plan, the cost of student loan forgiveness efforts could still rise.<\/p>\n<p>That\u2019s because Biden pledged that some elements of the plan, such as the 5% income repayment cap, would apply to all future borrowers as well as former ones.<\/p>\n<p>And although the rest of Biden\u2019s plan is yet to be settled, with the Education Department now working on ways to offer debt relief under the authorities of the Higher Education Act, it will undoubtedly add to the total price tag of loan forgiveness efforts under the Biden administration.<\/p>\n<p>The University of Pennsylvania Wharton School\u2019s estimate of how much the income limits on repayments will cost is as high as $360 billion over the next decade, with more costs to come if the program continues indefinitely.<\/p>\n<p>The cost of the <a href=\"https:\/\/www.conservativenewsdaily.net\/breaking-news\/browbeating-the-white-house-stacey-abrams-warnock-pushing-biden-on-student-loan-forgiveness-to-fire-up-base-report\/\" title=\"\u2018Browbeating The White House\u2019: Stacey Abrams, Warnock Pushing Biden On Student Loan Forgiveness To Fire Up Base: Report\">student loan forgiveness plan<\/a> that the Supreme Court struck down would have been $400 billion over 30 years, the Congressional Budget Office said.<\/p>\n<\/blockquote>\n<\/ol>\n<p>Read more: <a href=\"https:\/\/www.washingtonexaminer.com\/news\/bidens-new-plan-for-student-loan-forgiveness-challenges-and-consequences\">Biden&#8217;s New Plan for Student Loan Forgiveness: Challenges and Consequences<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Now that the Supreme Court has dashed President Biden&#8217;s student debt forgiveness plans, his administration is devising alternative strategies. Immediate actions include a one-year &#8220;on-ramp&#8221; period, beginning in October, where student loan holders will not face any repercussions. The administration is determined to find new paths forward for this endeavor.<\/p>\n","protected":false},"author":1,"featured_media":1963846,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_mo_disable_npp":"","fifu_image_url":"https:\/\/cndimages.nyc3.digitaloceanspaces.com\/breaking-news\/wp-content\/uploads\/2021\/01\/IMG_2758-scaled-1.jpg","fifu_image_alt":"","footnotes":""},"categories":[538],"tags":[],"class_list":["post-1963845","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-washington-examiner"],"fifu_image_url":"https:\/\/cndimages.nyc3.digitaloceanspaces.com\/breaking-news\/wp-content\/uploads\/2021\/01\/IMG_2758-scaled-1.jpg","_links":{"self":[{"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/posts\/1963845","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/comments?post=1963845"}],"version-history":[{"count":0,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/posts\/1963845\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/media\/1963846"}],"wp:attachment":[{"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/media?parent=1963845"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/categories?post=1963845"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/tags?post=1963845"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}