politics

Biden student loan forgiveness would reduce Obamacare revenue, Redic says

House, Senate candidates weigh in on president’s plan to cancel student loans

By Guy Page

President Biden’s proposed student loan debt forgiveness would likely increase the cost of federal ‘ObamaCare’ health insurance, the Libertarian nominee for the U.S. House of Representatives warned today.

The president’s plan would provide debt forgiveness of $20,000 for Pell grants and $10,000 for other grants, and would cap undergraduate loan payments at 5% of income.

“While I appreciate the President’s efforts as a holder of student loans, I’m deeply concerned about the inevitable increase in inflation and cost of living. As an accountant and person who understands math, I know that nothing is free,” Libertarian nominee Ericka Redic of Burlington said. 

“I’m also concerned about the Americans who will lose their ObamaCare subsidies,” Redic said. “Most Americans don’t know that the Obama Administration nationalized the student loan industry, in order to use the interest income to pay for the insurance subsidies.”

The Hill news site reported in 2013 that “according to the Congressional Budget Office, $8.7 billion of the money collected in student loan interest payments actually goes to pay for ObamaCare……The profits from student loans are divided as follows: $8.7 billion goes to pay for ObamaCare; $10.3 billion goes to pay down the federal debt; and $36 billion goes to Pell Scholarship grants.”

In effect, the federal government charged high interest on the student loans, and then invested the substantial profits into government spending – including Obamacare premiums. With fewer loan repayments, revenue for those three “buckets” will suffer.

Redic called this practice part of the government’s “predatory lending” to students desperate for a college education. 

This also doesn’t correct the reality that our Federal government is a predatory lender,” she said. “Why are they giving out loans for degrees that have no hope of earning enough income to actually pay the loans back? We must insist on education reform where we stop forcing young people into debt.”

Becca Balint, the Democratic House nominee, Tweeted yesterday that the president’s plan will help right racist wrongs, but that more action is needed. 

“Undergraduate students leave college with an average of $25,000 in student debt. That number doubles for Black graduates. @potus decision is a strong step toward reducing the racial wealth gap and creating a more prosperous future for millions of Americans,” Balint said. “There is still so much to do. Too many Vters will remain burdened by student loan debt. That’s why I will continue to fight for complete cancellation of student debt and work tirelessly as Vermont’s congresswoman to make college and post-high school education affordable for all.”

GOP candidate Liam Madden said: “There are things I like, and things I find troubling regarding President Biden’s actions on student debt relief. What I like: Investing in the education of our young people, and the productive freedom that living with less debt enables, is certainly a worthy goal that stands to pay society back. People putting more of their income into home ownership, and feeling more free to engage in entrepreneurship is certainly an upside.

“On the other hand, how that is achieved is an important consideration. Given the short time since the decision was made, I am not yet certain if Biden’s actions are legally and constitutionally appropriate. My understanding is that the President does have some discrete authority over the Department of Education’s debt forgiveness policy. However, it seems likely to me that Biden’s action goes beyond the authority given to him, and he is in fact superseding congressional action.”

The GOP and Democrat nominees for Senate took dramatically different positions on Biden’s plan. 

“The Student Loan Forgiveness executive order announced yesterday is obviously going to make a lot of people happy, but it sets a bad precedent and is more of the overspending that has caused inflation, recession, and a $31 trillion national debt,” GOP nominee Gerald Malloy said. “It is also unfair in many ways to taxpayers and workers and those that paid for their education, does not address the underlying education cost problem, and gives the appearance of ‘buying votes’ while further fueling the collapse of the dollar.  Overall this will not improve the economic situation our country is in. This is a perfect example of why we need to elect change.

Like Balint, Democrat Senate nominee and current Rep. Peter Welch Tweeted that Biden’s plan is just a start:

This plan provides much-needed relief for hardworking Americans, so many of whom are overburdened by student debt. I’m glad @POTUS is relieving some of that pressure for Vermont families.There’s more to do to make college affordable for all, but this is a good step forward.

Categories: politics

9 replies »

  1. It is NOT a good step forward. It’s a kick in the pants to ALL hard working American families especially those that paid off their loans, or those who financed their college education by working in addition to going to school. Not ALL Americans are getting money. This is socialism at its worse, and vote buying plain and simple.

  2. Pure Socialism! Take hardworking taxpayers’ money and use it to by votes from people who don’t live up to their responsibilities.

  3. How do DemocRATs hold their power, they usually win by cheating, but when
    eyes are upon them, just offer to pay off some debt…………… shameless !!

    Wake up people, you work hard for your money, and don’t let the scam for a
    vote will have you working overtime so they can get a useless degree and
    party on your dime!

    Don’t forget this in November…………..

  4. Candidate Redic makes sense about this issue. Candidate Molloy’s vision is also helpful. The other candidates essentially repeat the left’s mantra “…we’ll get you stuff and have the others guys pay for it. Now keep voting for us and get back in line…”

  5. Welch, “this plan provides much-need relief for hard working Americans.” No. Most of the folks taking this money aren’t actually working because the education institution has failed to install the value of a hard days work and accountability for one’s actions. This is more hush money further pulling back the curtain on all the many, many failures of the biden administration. Hard working Americans are the ones that will be forced to pay this debt and it will guarantee the perpetuation of their family’s financial suffrage which began under the biden regime.

    • This is “Buying Votes” ahead of the midterm elections…….nothin more nothin less

  6. I believe that the US Treasury is being flooded by GOP supporters’ checks as they now return the PPP loan forgiveness that they received. Right at the front of the line was Marjorie Taylor Green, who wrote her check out in her own blood saying “loan forgiveness is pure socialism and I want no part of it.”

    • Let me see if I understand — folks compromised by the government’s imprudent Covid rationalized… pay outs of “PPP loan forgiveness” are being equated with others, who promised to repay their loans, getting “forgiven”? Is there a logic flaw here…does anybody else smell mendacity in this argument?

  7. and up went the % rates; once again our “leaders” saw $$$ they could take for themselves……at our expense.
    “Most Americans don’t know that the Obama Administration nationalized the student loan industry, in order to use the interest income to pay for the insurance subsidies.”

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