Old North News

Taxpayers in North Carolina are now at the mercy of Biden's new student debt forgiveness plan, as the burden now falls on American taxpayers to help pay $1.7 trillion for 45 million borrowers. 

The Biden administration and the U.S. Department of Education have already canceled student loan debt for at least 40,000 Americans, with a new plan announced recently to deal with the remaining borrowers, according to Reuters. 

The student loan repayment pause will be extended through the end of August, according to an early April press release from the White House. This pause on loan payments was initially issued in January 2021 in an effort to give Americans a chance to financially recover from the effects of the pandemic.

Under the Public Service Loan Forgiveness (PSLF) Program, low-income borrowers and government officials will receive immediate debt cancellation, Reuters reported. Many will see forgiveness for older loans through income-driven repayment (IDR) forgiveness, and others will receive at least three years of additional credit toward IDR forgiveness. But, the plan fails to address just who will help pay for that debt. 

“Pres. Biden continues to pursue a permanent pandemic narrative at a tremendous cost to American taxpayers,” Jason Smith, Republican leader of the House Budget Committee, said in a press release. “Today, Pres. Biden added billions more to the taxpayer’s tab by canceling the student loan debts of thousands of borrowers and rewriting repayment contracts for millions more with the swipe of a pen. This comes soon after the president extended a blanket student loan payment moratorium that is costing taxpayers $4.3 billion every month, and further fueling the inflation fire raging across our country.”

Since taking office in January 2021, Biden has forgiven approximately $20 billion in loans, only slightly more than 1% of all federal student loan debt, according to Fortune.com. But, Smith estimates that additional loan forgiveness within Biden's plan could cost Americans $3 billion in taxes. 

“Democrats have made it clear that their goal is total forgiveness of all federal student loans – a gross attack on hardworking Americans who would have to foot the bill for a $1.6 trillion bailout to the wealthiest 20% of American households – those with graduate degrees, six-figure incomes, and high lifetime earnings,” Smith said.

In North Carolina, 12.5% of residents hold some form of student loan debt, according to estimates from EducationData.org. North Carolina residents account for $49.2 billion in student loan debt.

Loan forgiveness has been a selling point for Biden since the early days of his campaign and presidency, but he has been reluctant to do so despite pressure from congressional Democrats to cancel upwards of $50,000 in student debt per person, according to News Nation. During his campaign, Biden proposed forgiving $10,000 per federal borrower, but, over a year into his administration, this has not yet happened.