Biden Student Loan Forgiveness Plan Withdrawal Letter

 Biden student loan forgiveness

Biden Student Loan Forgiveness Plan Withdrawal Letter

Nearly half of the country’s governors have signed off on a letter to President Joe Biden asking him for Biden student loan forgiveness plan to be withdrawn that would cancel up to $20,000 for federal aid borrowers.

Late last month, Biden promised by announcing that he would give relief to students by giving at least $10,000 in student loan debt for millions of federal borrowers, as well as $20,000 to Pell Grant recipients.

On Monday, in a letter, the governors said “fundamentally oppose the plan of relief from loan and to force American taxpayers to pay off the student loan debt.”

The government, Republicans argued that Biden’s plan would harm low-income American families and they will be paying the debts of doctors, lawyers, and professors “with the most debt, such as $50,000 or more…”  Simply put rewardful situation for the rich and opposite for the poor.”

Biden has highlighted that this plan is aimed to help those who need it most, mostly middle-class and lower-income families.

To be eligible for Biden Student Loan Forgiveness, Borrowers’ incomes must be less than $125,000, or households earning $250,000 or less, are eligible for $10,000 in forgiveness, and for people who have been low-income Pell Grant recipients up to $20,000 debt relief.

Biden said on August 25

“Education is now necesscity to live a superior life… However, over the long run, that ticket to enter education has become excessively costly for such a large number of Americans,”

“The weight is so heavy that even if you complete your graduation, you may not have access to the middle-class life that the college degree once provided.”

“At a time when inflation is sky high due to your unprecedented tax-and-spend agenda, your plan will encourage more student borrowing, incentivize higher tuition rates, and drive-up inflation even further, negatively impacting every American,” the 22 Republican governors said in their Monday letter.

In contrast, Biden argued that the Biden student loan forgiveness for the student loans was “economically responsible,” pointing to “real benefits for families without meaningful effect on inflation.”

In their letter, the governors also said that Biden student loan forgiveness plan is estimated to cost at an average of $2,000 per taxpayer. As per The White House statement, the plan would cost around $240 billion.

Here’s a list of the 22 Republican governors who signed the letter for withdrawal request:

  • Alabama Gov. Kay Ivey
  • Alaska Gov. Mike Dunleavy
  • Arizona Gov. Doug Ducey
  • Arkansas Gov. Asa Hutchinson
  • Florida Gov. Ron DeSantis
  • Georgia Gov. Brian Kemp
  • Idaho Gov. Brad Little 
  • Iowa Gov. Kim Reynolds
  • Maryland Gov. Larry Hogan
  • Missouri Gov. Mike Parson
  • Montana Gov. Greg Gianforte
  • Nebraska Gov. Pete Ricketts
  • New Hampshire Gov. Chris Sununu
  • North Dakota Gov. Doug Burgum
  • Ohio Gov. Mike DeWine
  • Oklahoma Gov. Kevin Stitt
  • South Carolina Gov. Henry McMaster
  • South Dakota Gov. Kristi Noem
  • Tennessee Gov. Bill Lee
  • Texas Gov. Greg Abbott
  • Utah Gov. Spencer Cox
  • Wyoming Gov. Mark Gordon

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There are states where borrowers may be asked to pay tax for loan relief including:

  1. California
  2. Indiana
  3. Wisconsin
  4. Mississippi
  5. North Carolina
  6. Arkansas
  7. Minnesota

Assuming a state income tax rate is 10%, a borrower who gets relief of $10,000 from debt would be on tax for $1000 in state income tax, and a borrower who receives the Pell-eligible relief of $20,000 have to pay as much as $2,000 to the state.

The U.S. government has instructed that student loan servicing companies not send a federal 1099-C form to the millions of borrowers who receive debt relief.

To read the statement of the relief from the student loan of $10,000 and Pell-eligible relief of $20,000 , click here

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