Thwarted by the conservative-leaning court, Biden told reporters that his administration would pursue student loan relief through a different avenue, the Higher Education Act.
I’m not super familiar with how it’s suppose to work, but do they even need “taxpayer’s money?” Couldn’t they just decide the debt is paid (or like remove $10,000) and then call it a day?
You’re right. The debt is owned by the Dept. of Education. Forgiving a loan is just as easy as it sounds. They just… change some ledger somewhere and subtract $x from what Bob Student owes.
There’s no money transferred. The only real cost is the loss of interest payments in the future, but those are interest payments made by the student to the servicer (private organization that handles the day-to-day operations, like, collecting payments, sending statements, etc.).
But that potential revenue happens in the future. If the future revenue is less than expected, it’s exactly the same situation you see if say, Congress were to lower taxes. The revenue we expect to get in the future is now lower than thought it would be.
I’m not super familiar with how it’s suppose to work, but do they even need “taxpayer’s money?” Couldn’t they just decide the debt is paid (or like remove $10,000) and then call it a day?
You’re right. The debt is owned by the Dept. of Education. Forgiving a loan is just as easy as it sounds. They just… change some ledger somewhere and subtract $x from what Bob Student owes.
There’s no money transferred. The only real cost is the loss of interest payments in the future, but those are interest payments made by the student to the servicer (private organization that handles the day-to-day operations, like, collecting payments, sending statements, etc.).
But that potential revenue happens in the future. If the future revenue is less than expected, it’s exactly the same situation you see if say, Congress were to lower taxes. The revenue we expect to get in the future is now lower than thought it would be.
It’s the exact opposite of spending.