The loan forgiveness plan – estimated to cost the federal government between $300 billion and $600 billion – will condone up to $10,000 worth of student loans per borrower. Those with Pell Grants, given to students who are considered to have exceptional financial need, can see their student loans of up to $20,000 be forgiven. It will be available for those making less than $125,000 a year, or $250,000 for married couples.
Aware that the bailout for the college-educated stands on shaky legal ground, the government is ramming it through executive fiat. It invoked the HEROES Act, a post-9/11 'national emergency' law, that allows for debt cancellation "in connection with a war, other military operation or national emergency."
Political analysts, however, can understand the reason why the Biden administration suddenly thought of the notion that would again divide the sentiment of the nation.
Condoning debts will certainly please the borrowers who may be enticed to side with the Democrats, many of whom are trailing their Republican rivals in pre-election surveys.
Paying for the debts of the college-educated people is far from being a national emergency, however.
More galling is the reality that those who skipped college and went straight to work, those who joined the military to earn their way through college and those with only high school degrees who couldn't afford to go to college are among those who would be footing the bill. (Related: College prices, student loan debt skyrocket while university presidents earn more than Obama.)
Unsurprisingly, policy experts said the plan has significant drawbacks including higher costs to all taxpayers. They also pointed out that it does not solve the higher education system's main problem, which is its prohibitive cost that led to the big discrepancy of nearly 94 million Americans with college, including associate, degrees against 240 million who do not have.
While some Democrats hailed Biden's decision to condone student loans, others distanced themselves from the move. Even some of Biden's colleagues in the Democratic Party are crossing party lines, airing their displeasure over such a move that would certainly hamper the country's economy already heavily burdened by inflation.
Rep. Tim Ryan (D-OH), running to represent the Buckeye State in the U.S. Senate, said in a statement that he's "paying off [his] own family’s student loans." He warned that "waiving debt for those already on a trajectory to financial security sends the wrong message to the millions of Ohioans without a degree working just as hard to make ends meet."
Sen. Catherine Cortez Masto (D-NV) agreed with her colleague, expressing disagreement with Biden's decision. She remarked that instead of forgiving student loans, the government should be focusing on her proposal "to expand Pell Grants for lower income students, target loan forgiveness to those in need and actually make college more affordable for working families."
Watch the video below to find out who will feel the impact of President Joe Biden's student loan cancellation.