On 8/24/2022, during press conference, Fox News White House correspondent Peter Doocy repeatedly pressed White House press secretary Karine Jean-Pierre on the Biden administration’s plan for student loan forgiveness. President Joe Biden announced his plan to provide $10,000 in student loan forgiveness to those making $125,000 a year or less and up to $20,000 for Pell Grant recipients. When Doocy questioned Jean-Pierre about how the U.S. can afford this, the press secretary said the nation’s federal deficit has and will continue to drop.
“And you might spend $300 to $900 billion extra, so you can do that and not increase the deficit?” Doocy asked. “Here’s the thing. What we are trying to do here, we are doing this responsibly. You heard directly from the president. This is something that is going to be important for middle class Americans when you think about 90% of the folks who are going to actually benefit from this are making $75,000 or less. And you think about what Republicans did just a couple of years ago, they signed off on a $2 trillion tax cut for the wealthy and did not provide any way to pay for that.”
“Who is paying for this? But you’re talking a lot about how much it might cost or might not cost,” Doocy asked. “Who is paying for this?” The press secretary touted the work of Democrats in Congress and the Biden administration to reduce the deficit and allow the federal government to provide for the middle class. “But when you forgive debt, you’re not just disappearing debt, so who is paying for this?” Doocy interjected.
Jean-Pierre responded that the Biden administration is handling the student loan debt issue responsibly and promised it will help those who are in need. As Doocy “I just laid out for you, no, Peter, I just laid out for you how we’re seeing this process and why this matters,” she said. “I just laid out because of the work that we have done in the economy, because of the American Rescue Plan, because of the Inflation Reduction Act, and because of all of this work this president has done, has actually brought down our deficit by $1.7 trillion, unlike what Republicans did when they added to our deficit [by] $2 trillion and did not care at all, or thought about how this was going to be paid for.”
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Karine Jean-Pierre can’t say if Biden Student Loan Debt Bailout will lead Colleges To Raise Tuition. White House will ‘have to see’ if Biden’s loan plan results in higher tuition. The Education Department will keep an eye on whether schools raise their tuition in expectation that changes to the loan program will make it easier for students to take on more debt, White House officials said. “This is something the Department of Education is aware of,” White House press secretary Karine Jean-Pierre told reporters. “This is something that we’re monitoring.”
Some critics of Biden’s plan have claimed that the monthly cap on payments the president will institute would allow colleges to charge more upfront per semester without driving borrowers into default. “We have to see, right. We have to see,” Jean-Pierre said in response. “This is something that the Department of Education is going to look into, in particular with, when you talk about colleges potentially raising prices, that’s something that the Department of Education is looking at and is going to crack down on.”
A large number of Republicans have vocally attacked Biden’s Wednesday announcement, but Jason Furman, a Harvard economics professor and the chairman of former President Barack Obama’s Council of Economic Advisers, was one of the lone figures on the Left to criticize Biden’s proposal. “There are a number of other highly problematic impacts including encouraging higher tuition in the future, encouraging more borrowing, creating expectations of future debt forgiveness, and more,” he tweeted Wednesday afternoon. “Most importantly, everyone else will pay for this either in the form of higher inflation or in higher taxes or lower benefits in the future.” I did a thread on this last night but given the new announcement you need to double everything in it. A reporter asked Jean-Pierre to comment on Jason Furman’s tweets, She went around the question.
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WH: no answer “Who is paying?”, will ‘have to see’ if Bailout lead higher tuition, not cause inflation.