Speaker 1: Well, my friends, Joe Biden is doing it. Joe Biden will be canceling up to $20,000 in
student loan debt for those making under $125,000. It'll be $10,000 for most folks. But there's a
Pell Grant element to it which could raise that to $20,000. We're going to look at the details.
And I have to tell you, producer Pat was completely correct in his prediction. Producer
Pat has been predicting on the award winning bonus show that at a time advantageous to Democrats
for the midterm elections, Joe Biden would do some larger student loan forgiveness than
he has done so far. Now, remember that Joe Biden has already done even before this,
more student loan forgiveness than any other president. And we've covered that before. And Pat
said it's going to be close ish to the November midterms. Joe Biden's going to do something.
And I just didn't think he was. And here we are. Producer Pat, completely correct. New York Times
reporting Biden to cancel $10,000 in student debt. Low income students are eligible for more.
The plan would be $10,000 in cancelation for those earning under $125,000 a year
and $20,000 for those who received Pell Grants for low income families. Now, the debt forgiveness is
less than what some Democrats have been pushing for, and we will talk about that. Biden also
announced that a pandemic era pause on student loan payments, which has been in effect since
March of 2020, will expire at the end of the year. There is not yet an application process.
This has been a big question. Okay. So how do how do we get the forgiveness if we qualify?
What's the process? That process has not yet been made specific. A couple of other important notes
here. Students who receive Pell Grants will be able to get up to 20,000 in forgiveness. About
60% of borrowers have Pell Grants and the majority come from families earning under $30,000 a year.
The Education Department estimates 27 million borrowers will qualify for up to 20,000 in relief.
Then you've got millions more who will be able to get the 10,000. And there are a number of other
repayment modifications that are being made as well. So let's go through some of the different
reactions to this and then we're going to delve further into it. So one reaction is
this is not enough. 10,000 is not enough. 20,000 is not enough. Fine, fine. But this is already
overwhelmingly more than any other president has done by far. So as I've said before,
I tend to evaluate presidents based on what they do, generally speaking,
and also for things they promised to do but don't do. I think both are fair game just saying, well,
this president's bad because he didn't do these ten things that he never promised to do. That
seems to be a way to end up with relatively meaningless evaluations of presidents. So
when you look at what Joe Biden has done, he has by far forgiven more student debt than any other
president. Counterpoint Joe Biden is only doing this to help Democrats in November. Well, I mean,
those and everything politicians do to some degree is to help themselves. Is it also good for people?
And the answer is this is very good for people. And there are also some new rules for income based
repayment plans, which are arguably as big of a deal as the forgiveness repayment will be capped
at 5% of discretionary income rather than ten. That's a big source of relief. Your payments are
zero if you are below 225% of the federal poverty line due to an increase in the non-discretionary
fraction of income, unpaid interest is waived as long as you're making monthly payments,
even if the payments are zero. Based on those earlier guidelines that I mentioned, and that's
really a game changer. Many people are much more able to pay off a debt if they're not accumulating
and accruing more and more and more interest through the payment process. And that's a really
big deal. And then forgiveness after ten years on loans under $12,000 rather than only $20,000,
which is another interesting provision. So there is a significant amount of relief here
in addition to the forgiveness component for lower and middle income borrowers. And that's a really,
really big deal. Now, one question is, what does this do in terms of Democrat chances
going into the November midterms as we have talked? About before. Right now in the House
of Representatives, I'm sorry, in the Senate, the odds for Democrats have crept up from a 52%
shot at holding the Senate to 55. High fifties, 60, and now 64%. Right now, the FiveThirtyEight
estimate, the forecast is that Democrats have a 64% chance of retaining control of the Senate.
We will see whether that number increases on the basis of this announcement from Joe Biden.
In terms of the House of Representatives, well, Republicans are still favored to hold,
but by a smaller margin than at any previous point during this cycle. Right now, Republicans
are down to a 78% chance of taking the House of Representatives, Democrats at 22%. Still,
the most likely outcome is Democrats. Keep the Senate but lose the House. But the House numbers
are looking. It's hard to call them good for Democrats, but they are looking the least bad that
they have looked since we've started following this election cycle. So this is another major,
major accomplishment by Joe Biden. Later on in the show, I am going to now compare and contrast.
The one A.D. that has taken place for the Biden administration, which is which is
truly remarkable. I mean, if you look at the Biden administration two months ago and now, it is truly
stunning the change that we have seen. We're going to talk about that and we're going to contrast
that with what's going on on the Republican side, including a growing civil war wherein former
President Donald Trump is calling for the removal of Mitch McConnell as the Senate minority leader.
It could not be a greater contrast than what we are seeing. That'll come up a little bit later.