The Patriot Post® · RNC: Bidenomics Is Breaking Student Loan Borrowers
By the Republican National Committee
STUDENT LOAN PAYMENTS RESUME
- Student loan borrowers must again pay off their student loans, but now they’re doing so from a much more difficult financial position because of Biden.
- While Biden was pushing his student loan bailout – a “giant welfare program for the bourgeoisie” – he was also busy sending inflation soaring and making nearly everything more expensive for everyday Americans.
- Biden’s illegal student loan promises were shut down after the Supreme Court struck down his bailout– even Nancy Pelosi said Biden “does not” have “the power for [student loan] debt forgiveness.
- Biden wanted to unilaterally cancel up to $10,000 of student debt per borrower, a handout to the rich that would have cost taxpayers billions, increased tuition, and worsened inflation.
- According to the Penn Wharton Budget Model, Biden’s student loan bailout "could [have] exceed[ed] $1 trillion,” with the majority of the benefits going to the top 60 percent of earners.
- Biden’s plan would have done “little to help future college students, borrowers who have already paid off their loans and those who never went to college in the first place.”
- Experts warn that Biden’s plan would have encouraged colleges to raise tuition even higher, making the problem even worse.
- By striking down Biden’s student debt bailout, the Court thwarted a dangerous precedent that would have abused presidential power.
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.
- 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.
- More than four in ten college students say they are trying to pay off some type of credit card debt.
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.
- Average interest rates on a 5-year variable-rate private student loan currently sit at 12.04 percent, up from a record low of 1.84 percent in 2021.
- 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.
- The payments pause cost taxpayers $5 billion per month.
- 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.