Any day now, federal student loan borrowers throughout the U.S. could see their balances reduced by up to $20,000 thanks to President Biden’s student debt forgiveness plan. The administration is waiting on a green light from a federal judge to actually start reducing balances, but still says applicants can expect good news in the coming weeks.
While recipients won’t see that aid in the form of a check, any remaining balances will be re-amortized, meaning monthly payments will be recalculated to reflect the new balance. For borrowers, that means monthly payments could drop by up to $300 per month.
That extra cash will be a much needed lifeline to cover other bills or necessary expenses for many. But some borrowers plan to spend the money more freely.
In fact, 73% of anticipated recipients say they expect to spend their debt forgiveness on non-essential items, including travel, dining out and new tech, according to a recent survey from Intelligent.com.
That discretionary spending won’t come guilt-free though. The same percentage of recipients — 73% — say using debt forgiveness funds on non-essentials isn’t the right thing to do.
Both your personal spending habits and how you view the morality of debt are nobody’s business but your own. But if you’re waiting to see your student loan balance shrink, it’s a good idea to check in on your financial goals and desires before your budget changes so you can get the most out of any extra money.
Of course, not everybody starts looking up flights the minute they get a little unexpected cash or their monthly expenses drop significantly. The sames goes for many of those waiting for debt forgiveness.
Around 37% of respondents said they are very likely to spend the extra money on housing costs or groceries, which is not surprising given the way prices for both items have gone up this year.
Great. I haven’t taken a vacation in three years but now my tax dollars get to pay for someone else’s vacation.
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So in hipster terms: Airbnb, Uber Eats, and iPhones.
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Student loan forgiveness is nothing more than theft from the hardworking taxpayers of this country. The people who have diligently saved and responsibly paid off their loans are being forced to subsidize the lazy slackers who couldn’t be bothered to do the same. This is unfair and unjust, and it needs to stop. Student loan forgiveness is a handout that encourages people to take on debt they can’t afford.
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Student loan forgiveness was/is a dumpster fire:
- It hurts taxpayers because the government has to borrow money to pay off student loans.
- It encourages people to go into debt, which can lead to defaults and financial instability.
- It discourages people from pursuing higher education, which can hurt economic growth.
- It undermines the value of a college degree, which makes it harder for people to get ahead financially.
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But unfortunately they aren’t returning to work, which means urban businesses are getting wrecked.
Time for some actions