by Art Benavidez
Critics are taking Biden’s student loan forgiveness initiative to task because they believe it will only raise tuition in the future.
The Education Data Initiative reports that as of January 2022, in-state tuition and fees for a public 4-year university in Michigan climbed 3.31% in the last year. The cost for out-of-state tuition and fees climbed 2.76% during the same timeframe. The cost for room and board jumped a combined 10.59% in the last year.
During the 2021-22 academic year, the average annual cost of tuition and fees at a public four-year college was $10,740 for in-state students and $27,560 for out-of-state students. The average annual rate of inflation from college tuition is currently 8%.
“Joe Biden isn’t forgiving student loan debt, he’s subsidizing college tuition. This one-time giveaway is only going to raise tuition for future generations,” Mike Pompeo, former CIA director and U.S. Secretary of State, said on Twitter.
Several experts told Fox Business that Biden’s plan is expected to cause an incline in college tuition prices and actually add to the inflation crisis.
“Students will likely feel liberated to borrow more money on the assumption of future loan forgiveness, and universities will take advantage of the additional borrowing by raising tuition,” said Brian Riedl, a senior fellow in budget, tax and economic policy at the Manhattan Institute. “This is pretty similar to the fact that historically 60% of all student aid increases have been captured with tuition hikes, and this will be treated like an increase in student aid moving forward, which suggests that 60% will be countered by tuition hikes.”
National Center for Education Statistics data shows that from 1980-81 to 2020-21, the cost of attending a four-year college— including tuition and fees, plus room and board, and adjusted for inflation— has soared from $10,631 annually to $29,033 annually in the U.S., “representing a 173 percent increase in the last 40 years,” according to Bankrate.
According to the Education Data Initiative, college tuition has increased 747.8% since 1963, after adjusting for currency inflation.
The Committee for a Responsible Federal Budget estimates that Biden’s cancellation plan will cost between $330 and $390 billion and that his full student debt plan will cost $440 to $600 billion. The plan is said to be merely a short-term fix. The committee says it will temporarily wipe out nearly a third of the student debt portfolio, “but the sum of student debt will return to its current level in five and a half years, by 2028.”
As reported by Fox News, President Biden announced Aug. 24 that for borrowers making less than $125,000 a year, he will cancel $10,000 of federal student loan debt. For borrowers who attended college on Pell Grants, Biden’s forgiveness extends up to $20,000 in student loan debt. In addition, Biden has extended pandemic-era payment freezes through the end of this December.
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