Today’s episode focuses on the impact of Joe Biden’s student loan forgiveness program on the fiscal trajectory of the U.S..
David shares that Biden’s plan has only one stipulation: your annual income must be less than $125,000 as a single person (or $250,000 for a married couple).
The program only concerns federal student loans. and you can have up to $20,000 in student loans forgiven if you received a Pell Grant. Otherwise the limit is $10,000.
David questions whether Biden could do what he has planned, something that seems to be suggested by David Walker – former Comptroller General of the Federal Government – as well.
David quotes Dr. Larry Kotlikoff who touches upon the fact that up to three million Americans over 60 are still paying off their student loans.
For the non-partisan Penn Wharton, President Biden’s plan includes three major components. They estimated that the debt cancellation alone will cost up to $519 billion, while the loan forbearance will cost another $16 billion, and the new income-driven repayment IDR program would cost another $70 billion.
According to Maya McGinnis, President of the bipartisan Committee for a Responsible Federal Budget, Biden’s plan will do nothing to actually make education more affordable – meaning that it will likely drive up tuition costs, all while raising prices on a variety of other goods and services for ordinary Americans.
Even the Washington Post concedes that the Biden plan will cause tuition to increase more rapidly, primarily due to its income driven repayment IDR provisions.
David illustrates how the approach of Biden’s plan will encourage students to take out more debt and colleges to charge more in tuition, and how this will impact you as you’re trying to get to the 0% tax bracket.
Mentioned in this episode:
David’s books: Power of Zero, Look Before Your LIRP, The Volatility Shield, Tax-Free Income for Life and The Infinity Code
PowerOfZero.com (free video series)
@mcknightandco on Twitter
@davidcmcknight on Instagram