Is tax money used? Is anyone profiting from the program? Do colleges lose money? Please don’t make this political. I’d genuinely like to understand without all the talking point bullshit.
In: Economics
The tax money is used when the loan is first made. Loans are constitutional because there are several acts passed by congress, signed into law by the president that allows them. Student loan forgiveness has been attempted by various presidents for various reasons, typically because of the student being disabled or being defrauded by the university (typically, for-profit universities). Trump gave loan forgiveness to 25k disabled vets. Biden gave forgiveness to 323k permanently disabled people. Biden also attempted to give partial loan forgiveness to approx. 40 million students citing the HEROES act, but that was shot down by the supreme court.
If you simplify the paper trail:
The non-forgiveness version – Taxpayer pays taxes to the government. The government hands this money to the student. The student hands this money to the university. The student earns a degree. The student pays back money to the government. The government does allegedly beneficial things for society with that money.
The forgiveness version – Taxpayer pays taxes to the govt. Govt hands money to student. Students hands money to university. Student earns degree. Govt says that students like this student will have their loan forgiven in part or in full because they are disabled, a vet, performing some critical but low paying job (teaching/nursing types of jobs), or *just because we can*. Govt does not receive money back from this loan. Govt does not have any of this money to spend on allegedly beneficial things for society. The taxpayer effectively receives no benefit from these tax dollars.
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