Biden enrages Schumer, quietly u-turns on student loan debt as states sue: ‘Those damn Republicans’

As seven states filed a lawsuit against President Joe Biden’s student loan bailout, the administration quietly changed its stance on Thursday, potentially excluding up to 4 million borrowers with loans owned or backed by private companies.

(Video Credit: We Are Iowa Local 5 News)

Biden’s u-turn on student loan forgiveness is sure to enrage the left. Conservatives and millions of Americans pushed back hard against the socialistic move claiming the plan is an illegal use of executive power.

The announcement came from the Department of Education which now contends that privately-held loans won’t qualify for the relief plan. The Congressional Budget Office claims the program could cost $400 billion over a decade.

The cutting back on Perkins and Federal Family Education Loans is a result of probable court challenges across the nation, according to Politico.

Approximately four million Americans still have FFEL loans. It’s estimated that forty-five million Americans currently have student loan debt.

(Video Credit: The Daily Mail)

The backtrack by Biden will affect 770,000 loan holders according to CNN. When Biden announced the student loan relief, those holding FFEL loans were told they were going to be allowed to reorganize FFEL loans so they could qualify to receive $10,000 to $20,000 in student loan debt relief.

That will reportedly no longer be the case. On Thursday, it was decided that those who hadn’t reorganized were no longer eligible for debt forgiveness. The reasoning behind this move is that the businesses that hold those loans are the biggest legal threat to Biden’s program. Those holders would face losses as borrowers consolidate loans that would then be moved to directly owned debt by the government.

“As of Sept. 29, 2022, borrowers with federal student loans not held by ED cannot obtain one-time debt relief by consolidating those loans into Direct Loans,” the Department of Education announced.

The Department of Education is ostensibly “assessing” whether “there are alternative pathways to provide relief” to borrowers, and is “discussing this with private lenders.”

“Our goal is to provide relief to as many eligible borrowers as quickly and easily as possible, and this will allow us to achieve that goal while we continue to explore additional legally-available options to provide relief to borrowers with privately owned FFEL loans and Perkins loans, including whether FFEL borrowers could receive one-time debt relief without needing to consolidate,” a spokesperson stated.

Private banks that could suffer harm by losing business over the move could potentially sue to stop the debt forgiveness program, according to NPR.

The first lawsuit against the program was filed this week. It involved a plaintiff who claimed harm by residing in one of six states where loan forgiveness is taxed like income. That in itself would cause an individual to owe taxes even though they saved thousands in debt. The Biden administration claims that the program is voluntary and the plaintiff doesn’t have to take the $20,000 in debt relief.

Another suit that was filed on Thursday by six GOP states challenged the program because the president has declared the pandemic “over.” Arizona is now the seventh state to join that suit.

Biden used the pandemic as an excuse a number of times to extend the March 2020 student loan moratorium.

The White House is trying to downplay the $400 billion price of the program. They claim the estimate is based on 90 percent of eligible people enrolling in the program.

“CBO called its own estimate ‘highly uncertain.’ We agree,” the White House equivocated. “CBO assumes that 90% of eligible borrowers take the necessary steps to claim relief. We would be thrilled if 90% of eligible middle- and low-income Americans applied for this program. But unfortunately, that’s unlikely based on the data from other programs.”

Chief of Staff Ron Klain tweeted, “If you want apples-to-apples, note that this is a THIRTY year score; most often, CBO estimates a program’s cost over its first TEN years.”

Vermont Senator Bernie Sanders, who is a self-proclaimed Democratic Socialist, slammed GOP criticism of the bill in an interview with Newsweek.

“I didn’t hear the Republicans worry about the deficit when they provided a trillion dollars in tax breaks to the 1%, large corporations,” Sanders carped Thursday.

Senate Majority Leader Chuck Schumer was the loudest critic of the pullback. He was enraged over the forced backtracking and blamed Republicans for it, exclaiming, “Those damn Republicans,” during a speech on student loan forgiveness.

(Video Credit: The Daily Mail)

“They are bellyaching, you know, when anyone helps regular people. When they give tax cuts to the rich, they say they’re helping the middle class. When we help the middle class, they say we’re helping the rich,” the powerful Democrat railed.

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