What if all student loan debt just went away? What would that do to the federal government’s budget? If you have tens of thousands of dollars in debt right now, you probably don’t care how the government deals with it. Just make it go away, right?
Well, some people have already worked to pay off their student loan debt. And, some people chose to go into blue-collar jobs so that they didn’t acquire debt. So, we have to look at what the average American would be faced with if the federal government just decides to blanketly wipe out student loan debt.
It’s important to look at, especially as the Biden administration is making billions of dollars worth of student loans disappear over the next several months.
The U.S. Secretary of Education, Miguel Cardona, is trying to make a name for himself. And, he’s taking the typical route of a liberal by trying to buy the affections of Americans. He tweeted “Good news! Over the coming weeks, more borrowers, — including veterans & service members – will get emails about #PSLF debt cancellation.”
So, does this meant that people who have student loans will just randomly get emails? Imagine browsing your inbox to see an email from Cardona. “Congrats, your student loans are paid in full.” That’s not really happening, or at least we don’t think it will.
PSLF refers to the Public Service Loan Forgiveness plan that is in place. If you serve (or have served) in the military, for the government, or in some other public service capacity, you may be eligible to have your loans forgiven.
In the past, the loans had to be direct loans. Now, the Biden administration is making it easier because they’ll overlook the loans you’ve had in the past. You just have to convert your loans over to direct loans. And, then, you fill out the application to see if you’ve made enough qualifying payments. 120 qualifying payments is all it takes for loans to be forgiven…but that’s the fine print that they don’t really want to talk about.
It is estimated that all of the new changes to the program will benefit at least 30,000 people who have borrowed money toward student loans. Even if payments were late or made under the wrong payment plan, they can be counted toward the 120 that is needed.
Cardona has confirmed that approximately 10,000 students have already had over $700 million of student loans forgiven. And, the Department of Education will be emailing another 20,000 individuals to say that their student loans have been forgiven, too.
Biden has been spending money like it’s been going out of style. He’s canceled over $11 billion of student loans since he took office. It’s great if you have student loan debt. But, that’s a lot of money to simply give away.
The government gives out a loan with the expectation that it will be paid back. When the loan is canceled, it means they won’t get that money back. So, billions of dollars were basically handed out – and that’s going to have a long-term effect on the financials of the government.
The federal government has to operate on a balanced budget just like you and I do. If too much goes out and not enough is collected, we go into the red. And considering the billions of dollars of deficit the government is already in, they really can’t go around canceling debt.
Well, they can…but it just means they need to add more to the top. Since the government doesn’t sell anything, they’ll tax us for it. So, you might get your student loans paid off, but you’ll still pay for them in one way or another. And if you don’t have any student loans, well, you get to help pay for everyone else’s because you’re that generous. Oh, and if you’re not feeling particularly generous, you know what party not to vote for in the next election.