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They simply ignore that the plan is designed to target middle- and low-income families.
In a letter sent to the president on Wednesday, nearly half of American governors—all Republican—voiced their opposition to Biden’s student loan forgiveness plan, announced last month.
“We fundamentally oppose your plan to force American taxpayers to pay off the student loan debt of an elite few,” they write in the letter.
The main argument is that Biden’s student debt forgiveness will harm lower-income families by forcing their hard-earned dollars to go to repaying the debts of America’s wealthiest, including high-salary lawyers and doctors who hold debt from graduate degrees.
“The top 20 percent of earning households hold $3 in student debt for every $1 held by the bottom quintile, generating a lopsided reality where the wealthy benefit at the expense of the working,” the governors write in their letter. “Simply put, your plan rewards the rich and punishes the poor.”
But this argument misses the fact that Biden’s debt forgiveness project includes two different elements aimed specifically at preventing America’s wealthiest from obtaining debt forgiveness, instead restricting the program to middle- and lower-income families.
First, the plan will reserve higher levels of forgiveness for students who come from low-income backgrounds. Biden’s order will forgive $10,000 of federal student loans for all borrowers, but up to $20,000 for students who took out Pell Grants for college. Pell Grant recipients, by definition, only qualify for those grants if they are from the lowest-income families.
Additionally, the wealthiest Americans won’t qualify for debt forgiveness because they earn too much money. Biden’s plan is restricted to borrowers who earn at most $125,000 annually. That salary is far below the pay for most doctors, corporate lawyers, or MBA-wielding bankers or consultants.