July 19 – After the SCOTUS cut down President Joe Biden’s attempt to forgive student loans that would affect 20 million borrowers, the administration is apparently taking another shot at it.
It was announced this week that more than 800,000 borrowers will have federal loans forgiven if they have been paying for more than 20 years. It’s focused on income-driven repayments of federal student loans.
The whole plan will total more than $39 billion.
Allegedly there are a number of people who should have qualified for forgiveness, but never received it.
Pat Ryan of NewsTalk 103.7FM said, “Hopefully there’s going to be someone putting some brakes on this but it’s hard to see it though. This seems like a backdoor deal.”
Attorney Clint Barkdoll said, “This is a curious story to me because of the timing of it. Remember the Supreme Court in late June struck down Biden’s executive action on student loan forgiveness for the masses. Here we are just a couple of weeks later and he issues this announcement through the Department of Education, that they’re nonetheless going to forgive about 800,000 loans.”
These are apparently programs that borrowers would have signed up for and agreed that if they made timely payments for 20 or 25 years, the balance is then forgiven on the back end of the loan.
Barkdoll said, “What’s curious to me about it is that Biden and the education department, they are saying that there were mistakes made in how these monthly payments had been calculated over the years and the government has now reset or recalculated those and now they’re suddenly saying there’s over 800,000 people that are eligible, but we didn’t know about this just a few weeks ago. To me, there’s something suspicious about it. It looks like this one will happen. I have not read anything yet about legal challenges to this in as much that it’s not really a new policy, per se, but it’s more the White House re-examining or auditing people that should have been forgiven that were not forgiven, but the timing of it to me is really suspicious.”
Michele Jansen of NewsTalk 103.7FM said, “This is a scam by the federal government because of what they’re doing, and this is the stupidity of our elected officials giving over power to the administrative state. We have no way of really monitoring how they’re doing this or if they’re doing it correctly and fairly. This is the Biden administration, giving a middle finger to the taxpayers of this country and saying, oh, you’re going to use the legal system to say I can’t do whatever I want with your money? I’m going to go around you. I’m going to find an old program. I’m going to recalculate things in a way that’s not transparent or clear and I’m going to give a lot of money back anyway. Think of the disincentivization this gives to people. I mean if I would have known about this, I would have made the very minimum payment on my medical school loans because I’m not in a great financial state right now and I could have not used my inheritance to pay off my debts and my own hard work to pay off my debts and taken that obligation seriously. I could have just let it slide and gotten a huge benefit. I’m not saying everybody who’s getting money back knows this. Obviously they didn’t. He’s just using the administrative state to find a way to give back the money and to make people happy, buy their votes, buy their goodwill. This is disgusting in my opinion and by the time any kind of legal process goes back, they’ll already have given the money out and legal experts say there’s no way they’re going to claw anything back.”
Barkdoll wondered, “Will those forgiven balances be subject to a 1099C? In other words, will that be taxable income for the borrower that had that balance forgiven? I’ve not seen anything on that. Typically, that’s how forgiveness would work. These programs still very much exist in the federal government. If you go take out a student loan today, you can do this repayment plan. It’s based on your income. Then after three or 20 or 25 years, whatever is left on the back end, is just forgiven. So in light of this, might Congress get engaged? Do they want to cut off those kinds of programs? How is it that over 800,000 borrowers allegedly were not properly credited? I think there’s a lot of questions here that need to be examined.”
