Chairman Biden revived the possibility of millions of Americans disappearing this week ” Student Loan debt at the touch of a pen, a policy that could cost the federal government $ 321 billion. Although Biden has so far canceled only a fraction of the debt he promised to write off during the election campaign, the president – who is facing increasing pressure from both progressive and declining acceptance rates – has offered to cut $ 10,000 per week this week. borrower. “I’m thinking of dealing with some debt reduction,” Biden said Thursday in response to a question from the White House. “I am not considering reducing the $ 50,000 debt. But I am in the process of taking a closer look at whether or not there will be additional debt write-off.” EXPERTS WARN BIDEN CANCELED CANCEL DEBT WILL INCREASE INFLATION The write-off of $ 10,000 per borrower would require the government to cancel about $ 321 billion in federal loans, according to an analysis released by the Federal Reserve Bank of New York last week. This would benefit about 11.8 million borrowers, or about 31.1%, and cancel 30.5% of the loans that had been delayed or defaulted before the pandemic was tolerated. Under the policy, the average borrower would receive $ 8,478 in student loan write-off. President Biden speaks during the White House Affordable Care Act on April 5, 2022. (AP Photo / Carolyn Kaster / AP Newsroom) If the Biden administration imposes some restrictions on forgiveness, such as a $ 75,000 household income threshold, the cost of the program will be reduced from $ 321 billion to $ 182 billion, according to the New York Fed. As of December 2021, the total balance of federal loans was $ 1.38 trillion. The country’s debt level is already at a record high of $ 30 trillion after unprecedented levels of spending during the COVID-19 pandemic. Progressives, including Senate Majority Leader Chuck Sumer of the DN.Y., have asked Biden to cancel $ 50,000 in federal debt owed by executive order. Democratic lawmakers have argued that Biden could use the existing executive branch under the Higher Education Act to order the Department of Education to “modify, compromise, waive or release” student loans. Biden has argued for a $ 10,000 student debt waiver for most borrowers during his presidential campaign, but has raised questions about his legal authority to do so through an executive order. Last year, the president asked for a memorandum from the Ministry of Education to determine whether he had the power to unilaterally cancel the student loan debt. Such a sweeping executive action will almost certainly face a legal challenge and it is not clear if it could survive. Critics have argued that the use of this power goes beyond the power of the president granted by Congress. The cancellation of the student loan debt will also add to the already growing national deficit of the country, which amounted to almost a record $ 2.8 trillion for the financial year 2021. Senate Majority Leader Chuck Sumer speaks to reporters at the Capitol on September 28, 2021. (AP Photo / J. Scott Applewhite / AP Newsroom) The plan could also disproportionately benefit wealthy Americans, according to one analysis from the Becker Friedman Institute for Economics, University of Chicago. The study showed that total student loan debt write-offs will distribute $ 192 billion to 20% of the highest income in the US, but only $ 29 billion to the lowest 20% of US households. Under a universal write-off program, the average person among the highest-paid borrowers would receive $ 5,944 in forgiveness, while those with the lowest incomes would receive $ 1,070 in forgiveness, according to the study. Student loan arrears have doubled in the last decade, approaching a staggering $ 1.7 trillion. About one in six American adults owes money on federal student loan debt, which is the largest amount of non-mortgage debt in the United States. It has been cited as a major obstacle to people’s “economic lives” by Federal Reserve Chairman Jerome Powell. People rest on the grass at Brown University in Providence, Rhode Island, on September 25, 2019. (AP Photo / Steven Senne, Archive) The proposal comes as American consumers struggle with the highest inflation in four decades, with consumer prices rising 8.5% in March from a year earlier. Rising inflation has caused financial pain to millions of U.S. households, especially low-income families, eroding wage earnings and creating a huge political challenge for Biden, who has seen his acceptance decline amid rising prices. .
GET FOX BUSINESS IN ENGINE BY CLICKING HERE There is concern among some economists that putting more money in the pockets of Americans at a time of already high inflation could exacerbate the problem. “It is costly, inflationary, poorly targeted and fails to address key issues in the higher education funding system,” Maya MacGuineas, chair of the Federal Budget Committee, said in a statement on Thursday. “Complete debt relief would be a huge gift to wealthy doctors and lawyers, exacerbating our inflation crisis and costing almost as much as the 2017 tax cuts.”