Billions in Student Loan BAIL OUTS Will DESTROY the US Economy!

Becky, I'm trying to find merit in this proposed policy, and I can't.

This is policy born in hell, and I'll tell you why.

Nobody wins.

You make a decision as a young adult to pursue an education for a wide range of reasons, including advancing yourself in your career and your salary, etc.

And that's proven to work.

but you take on responsibilities, including student debt.

So what do you tell people, generations past, that have actually paid back their debt?

How about the people that are working so hard to get scholarships to excel?

What do you tell them?

Don't bother, it's free?

How about the people that never had the opportunity to go to college?

About 12% of the population has student debt.

The other 88% have to pay for them?

As whispers of financial relief sweep across the nation, the Biden administration's plan to forgive student loans, shrouded in uncertainty and controversy, stirs hope and unease.

In a nation where debt has chained millions, this bold move promises freedom.

But at what cost?

Amid cheers and skepticism, the reality of economic ripples and fairness debates looms, leaving Americans discordant over the unforeseen consequences that lie beneath this seemingly benevolent gesture.

This is not a distant threat or a hypothetical scenario, but a clear and present danger that could reshape the economic landscape for future generations.

The numbers paint a stark and sobering picture of the scale of this looming crisis.

According to the Federal Reserve, outstanding student loan debt in the United States has reached a staggering $1.727 trillion as of 2024, more than doubling over the past decade.

This mountain of debt weighs heavily on the shoulders of approximately 43 million Americans, with the average borrower owing nearly $39,000.

The sheer magnitude of this debt burden has far-reaching implications for the economy, affecting everything from home ownership rates to retirement savings and consumer spending.

Perhaps even more alarming is the rate of default on these loans.

The U.S. Department of Education reports that almost 7 million people, about 1 in 6 federal student loan borrowers, default on their loans, representing over 15% of all borrowers.

This default rate is significantly higher than for any other type of consumer debt, including credit cards and mortgages.

The consequences of default are severe, potentially ruining borrowers' credit scores and limiting their future financial opportunities.

And 45% of those in the department's sample of defaulted borrowers, approximately 3.2 million people, first had one of their loans enter default seven or more years ago.

The proposed loan forgiveness plan, if implemented in its fullest form, could cost American taxpayers upwards of $300 to $400 billion over the next decade, according to the nonpartisan Congressional Budget Office.

This astronomical figure represents one of the largest single expenditures in U.S. history, dwarfing the annual budgets of many federal agencies and raising serious questions about the long-term fiscal sustainability of such a program.

In this video, we'll hash out some of the various perils and pitfalls of a blanket student loan forgiveness initiative, scrutinizing its potential to ignite a financial storm that could impact generations to come.

To understand the gravity of this situation, it's essential to look at the historical context of student loan debt in the United States.

The roots of the current crisis can be traced back to the Higher Education Act of 1965, which established the first federal student loan program.

Originally intended to increase access to higher education for lower-income students, the program has since ballooned into a complex system of loans, grants, and subsidies that have fueled skyrocketing tuition costs and saddled millions of Americans with

debt.

Over the past several decades, the cost of higher education has far outpaced inflation and wage growth.

According to Forbes statistics, the average annual cost of tuition, fees, room, and board at a four-year public institution has increased by 169% since 1980 after adjusting for inflation.

This dramatic rise in costs coupled with stagnant wages for many workers has forced an increasing number of students to rely heavily on loans to finance their education.

The idea of large-scale student loan forgiveness gained traction during the 2020 presidential campaign, with several Democratic candidates including Joe Biden proposing various forms of debt relief.

Upon taking office, President Biden initially expressed support for forgiving up to $10,000 in federal student loan debt per borrower, but has since faced pressure from progressive lawmakers and advocacy groups to increase that amount to $50,000 or even eliminate all federal student loan debt.

debt.

However, the Biden administration announced on August 24 a plan to cancel up to $20,000 in federal loan debt, which would affect many of the nearly 43 million Americans who borrowed to attend college.

The White House announced that single borrowers earning less than $125,000 per year or households earning less than $250,000 a year are eligible for $10,000 in loan forgiveness.

Borrowers who fall under the income caps and receive Pell Grants in college will receive an extra $10,000 totaling $20,000 in forgiveness.

The plan has since come under several legal challenges causing the U.S. Department of Education to stop accepting new applications and halt the distribution of any forgiveness.

Student loan borrowers on average carry about $30,000 in debt, including federal and private loans, according to US News data.

The Biden administration's plan would bring debt relief to millions of borrowers and cancel the remaining balance for roughly 20 million borrowers, according to the US Department of Education.

The Biden administration's motivations for pursuing student loan forgiveness are multifaceted and subject to debate.

Supporters of the plan argue that it would provide much-needed relief to millions of Americans struggling under the weight of student debt, allowing them to invest in homes, start businesses, and contribute more to the economy.

They contend that the current student loan system disproportionately burdens low-income and minority borrowers, exacerbating existing inequalities and hindering economic mobility.

From a political perspective, some analysts suggest that the push for student loan forgiveness is at least partly motivated by a desire to win over younger voters, who have been disproportionately affected by the student debt crisis.

With the 2024 presidential election on the horizon, the Biden administration may see this issue as a way to energize a key demographic and differentiate itself from political opponents.

Proponents of loan forgiveness also argue that it could provide a significant boost to the economy by freeing up disposable income for millions of borrowers.

A study by the Levy Economics Institute of Bard College estimated that canceling all student debt could boost GDP by an average of $86 billion to $108 billion per year over a 10-year period.

This increased economic activity, they argue,

could potentially offset some of the costs of the forgiveness program through higher tax revenues and reduced demand for social services.

However, the potential downsides of large-scale student loan forgiveness are numerous and significant.

Perhaps the most glaring issue is the enormous cost to taxpayers.

With the national debt already exceeding $34.55 trillion as of 2024, adding hundreds of billions more for student loan forgiveness raises serious concerns about fiscal sustainability.

The US public debt ceiling has become one of the most prominent political issues in the states in recent years, with debate over how to handle it causing political turmoil between Democrats and Republicans.

This additional debt burden could lead to higher taxes, reduced government services, or both, potentially impacting all Americans, including those who never attended college or have already paid off their student loans.

The inflationary impact of such a massive injection of spending power into the economy is another major concern.

With inflation already at multi-decade highs, critics argue that forgiving student loans could further fuel price increases, eroding the purchasing power of all Americans and potentially necessitating even more aggressive interest rate hikes from the Federal Reserve.

This could lead to a slowdown in economic growth, higher unemployment, and a potential recession.

The potential impact on the credit market is also a significant consideration.

If the government were to forgive a large portion of student loans, it could create a moral hazard, encouraging future borrowers to take on more debt with the expectation that it might be forgiven.

This could lead to riskier lending practices and higher interest rates for all types of loans and potentially destabilize the broader financial system.

Equity issues are another major concern with blanket student loan forgiveness.

Critics argue that such a policy would disproportionately benefit higher-income individuals, as those with college degrees tend to earn more over their lifetimes than those without.

According to a Brookings Institution analysis, the top 40% of households by income hold 60% of the outstanding student debt.

Forgiving this debt could be seen as a regressive policy that exacerbates existing inequalities rather than alleviating them.

Furthermore, loan forgiveness does nothing to address the root causes of the student debt crisis such as the rising cost of higher education and the mismatch between degree costs and job market outcomes.

Without systemic reforms to make college more affordable and ensure the degrees lead to well-paying jobs, future generations of students may find themselves in the same debt trap, potentially expecting similar bailouts down the line.

The question of fairness also looms large in this debate.

Many Americans have made significant sacrifices to pay off their student loans or chose not to attend college due to the cost.

Forgiving some borrowers' debts while offering nothing to those who have already paid or chosen alternative paths could be seen as fundamentally unfair and divisive.

When weighing the pros and cons of student loan forgiveness, it's crucial to consider both the short-term benefits and the long-term consequences.

While providing relief to millions of borrowers could indeed stimulate economic activity and alleviate financial stress for many households, the potential costs and risks are substantial.

One must consider whether taking on hundreds of billions in additional national debt is worth the potential economic stimulus and relief for borrowers.

With the national debt already at historic levels, adding to this burden could have far-reaching consequences for future generations, potentially limiting the government's ability to respond to future crises or invest in other critical areas such as infrastructure, healthcare, and climate change mitigation.

Moreover, the inflationary risks associated with such a large-scale debt forgiveness program cannot be overlooked.

In an economy already grappling with high inflation, injecting hundreds of billions of dollars of spending power could exacerbate price pressures, potentially eroding any gains made by debt relief and hurting all Americans through higher costs for goods and services.

The potential for moral hazard in the education and lending markets is another crucial consideration.

If students and parents come to expect that loans may be forgiven in the future, it could lead to even more reckless borrowing and further inflate the higher education bubble.

This could ultimately harm the very people the policy aims to help by encouraging them to take on unsustainable levels of debt.

Another consequential detriment of this policy is its gruesome and highly unfair impact on the nation's taxpayers.

Moreover, this additional tax burden comes at a time when many Americans are already struggling with high inflation and economic uncertainty.

The median household income in the United States was $70,784 in 2021, according to the U.S. Census Bureau.

family earning this amount, the potential additional tax burden for student loan forgiveness could represent a significant portion of their disposable income.

It's also worth noting that this tax burden would fall on all Americans, including those who never attended college, those who have already paid off their student loans, and those who chose less expensive educational options specifically to avoid debt.

This raises serious questions about fairness and equity in public policy.

The National Taxpayers Union Foundation, or NTUF, released new data showing how much Biden's student loan cancellation will cost taxpayers in each state.

On average, Biden's plan to transfer the cost of student loans from wealthy borrowers to working-class Americans will cost the average taxpayer over $3,500.

Worse off, this scheme will shift the cost of expensive degrees to Americans who did not attend college.

Updated figures predict that Biden administration actions will cost Americans who are 25 years or older without a bachelor's degree $3,847 each.

In essence, Biden's regressive student loan debt bailout is cruelly unfair to the people who couldn't afford college, the taxpayers who will shoulder the burden, and the students who work their way through school.

As the Biden administration barrels forward with its student loan forgiveness plan, America stands on the precipice of a financial abyss, where the weight of trillions in national debt threatens to crush the dreams and aspirations of future generations.

The looming specter of runaway inflation, crippled credit markets, and a society torn apart by questions of fairness and responsibility paints a gloomy picture of a future where the very foundations of economic stability and social cohesion may crumble under the burden of a potentially catastrophic

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