White House claims deficit reductions will pay for student loan handout
Economist Steve Moore joins 'Your World' to rebut Biden's assertion as giveaway viewed as unfair.
NBC News reported on Monday that the rollout of President Biden's plan for student loan debt "could get messy" and that companies that give out loans believe the administration is trying to do too much.
"Student debt relief advocates and companies that administer loans say the Biden administration is trying to do too much in too short a time frame, and that they lack the systems and procedures to help ensure the process runs smoothly," the NBC report read.
The report noted that borrowers will need to fill out a form from the Department of Education when it becomes available in October and that it doesn't leave a lot of time for people to submit their applications ahead of Dec. 31, which is when payments are set to resume.
Kyra Taylor, an attorney at the National Consumer Law Center, told the outlet that the October rollout date "doesn’t give people a lot of time, especially if the application crashes in the same way StudentAid.gov crashed after the cancellation announcement."
BIDEN STUDENT LOAN HANDOUT PLAN COULD BALLOON PAST $1T: PENN WHARTON ANALYSIS
U.S. President Joe Biden greets people on South Lawn after arriving on Marine One from a trip to Delaware at the White House in Washington, U.S., August 24, 2022. (REUTERS/Leah Millis)
"Advocates say the White House should have gotten the application website ready sooner so that it could have been available to borrowers as soon as Biden announced the cancellation. They also questioned why the administration did not allow for more time before payments resume," the report said.
The president said at the end of August that resuming student loan payments that have been on pause throughout the COVID-19 pandemic will prevent his plans to forgive student loan debt for certain borrowers from "having a meaningful impact on inflation."
One consumer protection advocate told the outlet that there should be a full-blown public service announcement and campaign to get Biden's plan right.
"Loan servicers, private companies that the government has contracted with to manage federal loans, have said they are already overwhelmed with calls from anxious borrowers who are facing long hold times only to be told there are no answers to their questions yet," the outlet reported.
Washington, DC, USA - January, 12, 2021: US Department of Education Building. (iStock)
The report also noted that many loan servicers slashed their staff during the pandemic because loan payments were paused.
"We’re trying to build five different airplanes while they’re going down the runway at the same time, and we only have the same number of technicians that we had the week before and that’s going to make the time process longer for a lot of these projects than it normally might be," Scott Buchanan, executive director for the Student Loan Servicing Alliance, told the outlet.
U.S. President Joe Biden speaks during a rally hosted by the Democratic National Committee (Photo by Drew Angerer/Getty Images)
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Biden announced his plan to forgive $10,000 of federal student loan debt for borrowers earning less than $125,000 per year, and up to $20,000 for Pell Grant recipients.
The president also extended the payment pause until the end of December.
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