what's the metaphor for forgiving college debt?
It would be like someone who is addicted to heroin,
who's going through horrendous withdrawals.
And there's a certain person in the room who says, well the only thing we can
do to do away with these withdrawals is give them another bump of heroin.
You just heard from a Fox News host who of course is coping hard with the fact that
president Joe Biden today has announced that he will be forgiving a portion
of student loan debt.
And yes, it will be means tested.
Yes, there are limitations to the amount that will be forgiven.
But nonetheless, one of the unexpected benefits of this news is that
we get to watch wealthy people cry all over the corporate media.
I know that was a Fox News clip, but
believe me it doesn't matter what you're watching.
Whether it's CNN, MSNBC, Network News, all sorts of ridiculous arguments
against the one really great thing that Biden has done, okay?
And that is forgive student loan debt.
I want to give you the details on how he is going to do it.
Now, he first made the announcement via Twitter where he wrote.
In keeping with my campaign promise my administration is announcing a plan
to give working and middle class families breathing room as they prepare to
resume federal student loan payments in January of 2023.
So that by itself is already a big announcement because he is also noting
that the repayment of student loans don't start back up until January of 2023.
So with the new year the payments will begin again.
So that was a piece of news in and of itself.
And in that tweet, he also included this graphic that says.
Some students will or some student loan bar I should say can expect $20,000 to
be forgiven if they went to college while receiving Pell grants, okay?
And you only qualify for Pell grants if there's proof submitted,
that indicates that you come from a lower income family.
So it's a little bit of government assistance.
Certainly not enough government assistance to prevent students from going into debt.
But nonetheless, for students who did not need Pell grants,
they can still qualify for student loan forgiveness to the tune of $10,000.
And it will be means tested as that graphic had noted.
So if you're making more than $125,000 a year, you will not qualify.
But there are other pretty surprising goodies in this announcement,
will learn more details in the coming days.
But the Department of Education will announce details on how borrowers
can claim this relief they have to apply for it.
So it's not some automatic program.
It would have been better if it was automatic.
Sometimes there's a barrier for
some people when it comes to the application process.
But nonetheless, the department is also proposing a federal rule aimed at making
the student loan system more manageable for current and future borrowers.
So we'll learn some more details about that as well in coming days.
But here's what we know detail wise.
The proposed rule would change income based repayment for student loans,
cutting in half the amount borrowers would have to pay each month on their
undergraduate loans.
While borrowers with both undergraduate and
graduate loans will pay a weighted average weight rate.
So the proposal would also, and I think this part is really important, okay?
The proposal would also raise the amount of income that is considered
non- discretionary income and therefore protected from repayment.
And it would forgive loan balances after 10 years of payments rather than
20 years under many income-driven repayment plans for
borrowers with original loan balances of $12,000 or less, the department said.
So the $12,000 or less, that limitation is concerning.
But I do like the fact that they have made the repayment program a lot easier for
these students.
The debt forgiveness after 10 years is good news as well.
And the only concern I have about that is as we saw with the Trump administration.
If you have a more unfriendly pro corporate administration in place,
they might not honor the loan forgiveness program as the Biden
administration envisions it.
So there needs to be some safeguards in place to ensure that a Republican
administration doesn't essentially go against this.
Because this is at the end of the day, an executive order.
He's doing this through executive action.
This is not something that was done through Congress.
And just like with the DACA program under Obama, you can have someone like Trump
come in and essentially reverse the program through an executive order.
Because again, if it's done through executive order, it's easier for
an incoming administration to essentially reverse it.
And I am concerned about that.
But just something to keep in mind.
It turns out that the amount forgiven in the student loans will not be
considered taxable income and that is so important.
It's really, really good news.
So Jeff Stein from Washington post says due to a provision that chuck
Schumer included in the American rescue plan last year,
bidden student debt forgiveness will not be counted as taxable income.
That's really important.
Because previously any debt that's for given will count as taxable income and
then you have to pay a lot more in your taxes when you file.
But because of this provision which shockingly
was included in the American rescue plan by Chuck Schumer,
the amount forgiven will not be considered taxable income.
So I wanted to make that clarification.
That's actually really, really good news.
It's important to remember that while everyone is demanding more in student loan
forgiveness, and I certainly would have loved to see that.
To be fair to Biden,
he was always honest about what he wanted to do on the campaign trail.
So on the campaign trail, Biden called for immediately canceling a minimum of
$10,000 in student loan debt per person as a response to the pandemic.
As well as forgiving this, he didn't do.
As well as forgiving all undergraduate tuition-related federal student debt
from two and four year public colleges and universities for
those borrowers earning up to $125,000 a year.
So what I would like to see moving forward is more of a band,
more than just a band aid.
When it comes to the very real problem that we're seeing with higher education in
this country.
It's become incredibly unaffordable, unattainable.
There are less young people even considering college today because they
don't want to dig themselves into a massive hole of debt that they can't
discharge in a bankruptcy.
So I would really like to see more of a systemic solution
that gives students a more affordable option.
And a good way to do that is to go back to what we used to have in this country
when we had free public colleges, right?
You want to pay for a private college, do you boo?
It's up to you.
But when it comes to public colleges and universities,
I really do think they should be tuition free.
We need to have a system in place where everyone, regardless of what their
socioeconomic status is, has the ability to get a higher education.
Because at the end of the day, we all know that someone with a college
degree is very likely to earn more money through their career
compared to an individual who did not get a college degree.
So I want that opportunity to be afforded for everyone.
And this is something that is going to provide some relief for now.
But remember we're already dealing with $1.4 trillion
dollars in federal student loan debt.
So this is going to cut that down a little bit, but
in a few years we'll be right back to where we were today, right?
And so or
where we were before Biden decided to do a little bit of debt forgiveness.
It doesn't solve the problem.
It's a bit of a band aid to be honest.
And I would like to see again a change in how this system works.
So there is an option for
people to go to college without having to take out any debt at all.
Or very little debt if any.
So this is also just kicking the can down the world road.
[MUSIC]
There is currently $1.6 trillion
$10,000 per borrower was canceled.
And that's according to the committee for a responsible federal budget.
And prior to the announcement, Biden had also forgiven tens of billions of dollars
in student loans for students who had been defrauded from for profit colleges.
So those were the devised the ITT Text, The Corinthians colleges.
Has forgiven about $32 billion in Federal Students loans for
students who had gone to these types of institutions.
And while there are also sorts of Chicago school of Economics Goons on
the corporate press today crying about this.
In reality, they're not concerned about,
I don't think they're actually concerned about inflation.
Like that's one of the top arguments they make.
The other talking point is well what about all the people who paid
their student loans?
It's not fair to them.
Look if you happen to fall in that camp,
if you managed to pay off your student loans, I hear you.
I'm sure you worked really really hard to do it, but you got through it.
And right now there are a ton of people in this country who
are struggling because of that unbearable debt looming over them.
Debt that they cannot discharge.
Debt that's holding them back from just doing basic things
that older generations were able to do once they were adults.
Things like buying homes, being able to have children.
There are things that people want to do that they can't engage in because of
the economic burden associated with insanely high tuition which of course
translates to insanely high student loan debt.
And so I mean it's like the same reasoning as,
I have a family member who died of cancer.
Why are we looking for a cure for cancer?
My family member couldn't take advantage of it.
Like society progresses.
We should be happy about that.
And we should be happy that for once we have the government very modestly
looking out for ordinary people as opposed to corporate interests.
And so that's why I will give Biden some credit for this.
I will also give him credit for the way he reacted during a press conference.
That's a story that will do a little later,
because he was asked by reporters whether this was the right move and
whether this is going to have an impact on inflation.
And Biden had a shockingly good answer.
Now let's talk a little bit about why the corporate world wants to
do absolutely nothing in relieving student loan debt.
It's because the interest associated with paying back federal
student loans is really a regressive tax.
We have cut taxes on the rich, we have cut taxes on corporations.
And the federal government is able to recoup some of those lost
revenues through charging interest on Federal Student Loans.
And while it might be a little difficult to find the exact numbers slate actually
did a pretty good job in looking for just how much the federal
government makes from these federal student loan interest payments.
So let's go to the graphic seven here.
70.3 billion is the amount the government collected on its loan
portfolio in financial year 2019.
That was the last full year before payments were
paused due to the coronavirus pandemic.
32% of the total, or 22.4 billion consisted of interest payments, okay?
So they're getting some of their money back,
meaning the principal plus the interest.
So they're collecting $22.4 billion dollars on student loan interest alone.
Now, the Federal government also uses this shady little trick used by big banks when
it comes to mortgages.
And I want to talk about that.
So student loans are structured to advertise like a mortgage, okay?
With debtors mostly paying interest early on and principal later.
So when you hear these stories about students who have been paying at least
the minimum payment necessary on their student loans.
And they've been doing it for years and years and years and
they notice that their amount continues to go up.
It's because all they're really paying is the interest.
That's it. The interest is front loaded just like it
is with a mortgage, right?
Just like it is with a big bank or credit union.
They want to make sure they collect their interest before they allow you to pay down
your principal.
And the fact that the federal government is doing that with federal student loans
is insane.
But it gives you a sense of what the priority here is, right?
They want to make sure they increase the federal government's revenue on the backs
of people who just wanted to better their lives and get a decent higher education.
So compare that to how the elected federal, unelected I should
say how the unelected Federal Reserve does things, right?
Because if we're gonna do a comparison here, all right?
Let's help out the homies.
Let's help out the students who are struggling with student loan debt.
And everyone's freaking out about the number,
because some analysis indicates that it would cost the federal government
somewhere between 200 billion to $300 billion to do this.
This whole program.
Well keep in mind that when the pandemic happened, the unelected
Federal Reserve decided to pump money into corporations to keep them afloat.
And when you compare the numbers here,
it really tells you where the priorities have been for corporate media.
And for all the individuals who are now whining about students getting some
relief.
As the Covid 19 pandemic emerged in March of 2020,
the Fed implemented an aggressive QE strategy, that's quantitative easing.
It immediately injected more than 700 billion dollars in asset purchases.
In June of 2020 had implemented an ongoing QE program
to purchase 120 billion of bonds per month.
80 billion in US Treasury securities and 40 billion in mortgage-backed securities.
That program continued until the Feds started tapering its purchases in
December of 2021.
So when it comes to helping out corporations, when it comes to essentially
buying assets, the Federal Reserve buying assets to keep these companies afloat.
Even to the tune of $700 billion in the very beginning of the pandemic.
You really get a sense of what the commentary that
we're hearing today is really about.
I mean there was no pushback about what the Fed had done with quantitative easing.
So much pushback when it comes to again, a mere 10 to 20,000
getting forgiven in student loan debt per student loan borrower
assuming they're making less than 100 $25,000 a year.
And I should also note that the media is being incredibly dishonest
about how the general public feels about what Biden did today.
For instance, if you go to CNBC, there's a headline that says,
59% of Americans worry student loan forgiveness will make inflation worse.
So you get the sense by seeing that headline that the majority of Americans
are against this.
And the article CNBC published was in regard to a poll that they had done
with momentous.
And if you just go all the way down in that piece to get the poll results
that are actually relevant.
You'll find that the survey found that 30% of all adults say.
there should be no student, there should be no student loan forgiveness for anyone.
So that's it. Just 30% of Americans are against it.
Meaning 80% of Americans are in favor of providing, I'm sorry,
70% of Americans are in favor of providing student loan relief to these borrowers.
Yet there are sharp divides, I should note among those who hold the view,
while 39% of men say no loans should be forgiven.
Just 22% of women agree with that statement.
Only 19% of adults between 18 and 34 say,
say no loans should be forgiven versus 39% over the age of 65.
And those results aren't really that shocking when you consider that the people
who are impacted the most by these insane tuition costs and the student loan debt or
young people, they want to get a higher education and
the cost burden associated with it is just unbearable.
So the results of that survey don't surprise me.
And to be honest, the results of how the media is handling this also does not
surprise me, but definitely dig deeper.
Don't let them lie to you.
It's about time the federal government does something to help average americans
with their own economic struggles