Old North News

As the national debt ticks upward, President Joe Biden keeps adding to it. And, his recently announced student loan forgiveness plan is the latest way he’s doing that.

Biden announced Wednesday that he will cancel up to $20,000 of student loan debt per borrower. He also extended the pause on federal student loan payments through the end of the year.

"That would cost about $300 billion this year, and $330 billion over 10 years, says the Penn Wharton Budget Model,” The Wall Street Journal editorial board said in a recent op-ed. “That’s far more than the $102 billion the Inflation Reduction Act purportedly reduces the deficit over 10 years starting in 2027. About 70% of the loan relief would go to borrowers in the top 60% of income distribution.” 

North Carolinians can expect more inflationary pressure as a result of the decision, too. The loan forgiveness plan was publicized after the recent passage of the Inflation Reduction Act, and the Journal editors say Biden's student debt forgiveness plan is counteractive, calling it "an inflation expansion act.”

Biden said that for borrowers making less than $125,000 a year, he will cancel $10,000 of federal student loan debt, Fox News reported. For borrowers who attended college on Pell Grants, Biden's forgiveness increases to $20,000. In addition, Biden also extended pandemic-era payment freezes through the end of the year. 

The nation's federal student loan debt currently tallies more than $1.6 trillion, the White House said. 

It is spread across all the states, with the Education Data Initiative saying that if it were evenly distributed, federal student loan debt averages $29.0 billion per state. 

The Treasury Department reports that the country's current national debt is now at $30.7 trillion. 

More than 43 million Americans are paying off federal student debt, Fox reported. The latest federal statistics show that almost a third of the debtors owe less than $10,000 and more than half have a balance of less than $20,000.