October 4, 2023

RNC: Bidenomics Is Breaking Student Loan Borrowers

Biden’s economy has made it harder for students to get new loans and pay off old ones.

By the Republican National Committee

STUDENT LOAN PAYMENTS RESUME

AS PAYMENTS RESUME BIDENOMICS IS WREAKING HAVOC ON BORROWERS’ BUDGETS

  • Prices have risen by 17.4 percent since Biden took office – with Americans still reeling from the lasting effects of inflation.
    • On a year-over-year basis, inflation under Biden has averaged 6 percent – more than double the level of inflation seen under any of the last four presidents. 
      • Rent is up 15.9%.
      • Electric bills are up 24.6%.
      • Grocery prices are up 19.3%.
  • In order to afford payments in this economic environment, many borrowers are likely to pull back on their spending habits.
    • 56 percent of borrowers say they will have to choose between making their loan payments or covering necessities, like rent and groceries.
    • Economists expect this will cause a 0.8-point decrease in consumer spending growth in the fourth quarter.
  • Other borrowers are sacrificing their savings in order to pay off student debt as the cost of living surges.
  • Borrowers who were in financial distress before the pandemic are especially vulnerable now, having used the pause to increase credit card debt and auto loan debt to afford necessities under Bidenomics.
  • Meanwhile, credit card debt is rising by billions of dollars, already surpassing $1 trillion – a new record.

BIDENOMICS HAS CAUSED INTEREST RATES TO SOAR, IMPACTING STUDENT LOANS

  • Hardworking Americans who want to pay off their student loans, as well as those thinking about going to college, are getting pummeled by higher interest rates thanks to Biden.
  • Borrowers of private student loans with variable rates have been directly impacted by the Fed’s decision to raise interest rates.
  • While borrowers who already hold federal student loans are not affected by the Fed’s actions, new batches of federal loans will hold higher rates.
    • Borrowers with federal undergraduate loans disbursed after July 1, 2023 will pay 5 percent – just three years ago, rates were below 3 percent.
    • This is the highest level that most undergraduate borrowers have faced since 2013.

BIDEN’S STUDENT LOAN PAUSE COST TAXPAYERS BILLIONS

  • Biden’s pause on student loan payments cost American taxpayers nearly $300 billion, with “most of these costs” accruing under the Biden administration.
  • Higher-income earners benefited the most from the pause, despite the White House’s claim that 90 percent of their planned relief would go to families with incomes less than $75,000.
    • Families with incomes greater than $75,000 enjoyed more than 65 percent of the relief from the paused payments.
    • The top 20 percent of households received nearly 30 percent of the benefit while only accounting for 16 percent of families with federal student debt.

    Originally posted here.

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