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To hear the White House tell it, the administration’s student loan forgiveness scheme is a break for hard-working middle-class Americans courtesy of Scranton Joe.
When President Joe Biden announced the plan in August, the White House said the program would exclude the wealthy. “Borrowers are eligible for this relief if their income is less than $125,000,” the administration said. “No high-income individual or high-income household,” it assured the public, “will benefit from this action.”
Well, we got played. Now we have the application form for debt relief, and, lo and behold, it tells a different story. As it turns out, one needs to have earned less than $125,000 in 2020 or 2021 in order to shave off up to $20,000 of debt. You read that right: Those who made $124,000 in 2020 and $300,000 in 2021 qualify for this plan.
That’s good news for recent law school graduates, many of whom are now employed at white-shoe law firms making over $200,000 a year, or for doctors who just completed their residencies.
That’s not the only chink in the armor: Applicants don’t have to provide proof of their income, either. The administration’s scheme also relies on the honor system, warning applicants to be ready in the unlikely event the IRS follows up for paperwork. It’s unclear what enforcement mechanism the Biden administration will rely on to root out those looking to cheat the system, since we’ve been told time and again that the tens of thousands of IRS agents about to come online thanks to the “Inflation Reduction” Act are reserved solely for billionaire tax cheats.
Beyond that, Paycheck Protection Program funds aren’t considered income, nor is inherited wealth, meaning one could have received a cash influx and still qualify for Biden’s helicopter cash drop. Remember this when Biden drones on about how “not a dime will go to those in the top 5 percent of the income bracket.”
None of the policy wonks at the White House are even pretending they have a plan to pay for this pre-election boondoggle either, which is perhaps why they had to resort to all sorts of budgetary gimmickry to get it over the finish line. As Hunter Biden knows, the comedown is never worth the high. More deficit spending will fuel inflation—the last thing a country facing a catastrophic recession needs.
That’s Econ 101. Perhaps some of Biden’s advisers should go back to school—tuition is on the house!
Published under: Debt, Joe Biden, Student Loans
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