Federal Judge Deals Blow To GOP States’ Fight Against Biden’s Student Loan Forgiveness As Only 3 In 10 Adults Show Support

A Kansas federal judge ruled on Friday that only three of the 11 states that filed a lawsuit against President Joe Biden’s recent $156 billion student loan debt forgiveness plan could proceed with their case.In late March, 11 Republican-led states filed a lawsuit against the Biden administration’s student loan debt forgiveness plan, stemming from last year’s rejection of the president’s $430 billion student debt erasure initiative by the U.S. Supreme Court.States Standing QuestionedDepositphotos Photo by iqonceptThe states requested that the Kansas district court halt the implementation of the SAVE plan. On June 7, Judge Daniel Crabtree responded, stating that only three states—South Carolina, Texas, and Alaska—”just barely” had standing to argue that the SAVE plan would reduce their state revenues.To prove standing, plaintiffs needed to demonstrate that they would be harmed by the policy, that the harm could be traced back to the defendant, and that the relief they sought would address those harms. Crabtree noted that the standing of these three states was “weaker than the one that prevailed” at the Supreme Court. Joe Biden has faced criticism from Republicans who accuse him of shifting the burden to taxpayers and undermining the Supreme Court, which blocked the White House’s student loan forgiveness plan last year. Monthly Student Loan Forgiveness AnnouncementsPresident of the United States Joe Biden’s speech on the economy. September 14, 2023, Largo, Maryland, USA: The US President Joe Biden delivered remarks on Thursday (14) afternoon on Bidenomics at Prince George’s Community College in Largo, Maryland. Credit: Jack Marain/TheNews2 (Foto: Jack Marain/Thenews2/Deposit Photos)With the November election approaching, the administration has been keen to highlight its progress in debt cancellation programs, making similar announcements almost monthly.In April, the administration announced another round of cancellations totaling $7.4 billion for 277,000 borrowers.On May 1st, the Biden administration has announced the cancellation of $6.1 billion in student loans for 317,000 borrowers who attended The Art Institutes.On 22nd May, the cancellation of an additional $7.7 billion in student loans was announced. $167 Billion in Loans Forgiven So FarDepositphotos Photo by gints.ivuskansIncluding the latest forgiveness action, the administration has now cancelled over $167 billion in debt for almost 4.7 million borrowers which amounts to 10% of all outstanding student loan debt and an average of $34,783 per student.Biden Plans To Offer More Student Loan ForgivenessFoto: Kyle Mazza/TheNews2/Deposit PhotosIn addition to yesterday’s announcement, the Biden Administration introduced broader student debt relief proposals set to take effect this fall impacting 30 million borrowers.Biden’s recent proposal for student loan forgiveness is advancing as a proposed regulation, presenting him with a renewed opportunity to rally young voters for the upcoming November election.The Education Department had filed paperwork for the new regulation on April 16th, 2024 kickstarting the 30-day public comment period which ended on Friday, May 17th 2024.The Department of Education will spend a few weeks reviewing the feedback and then publish a final ruling. Biden’s plan would use the 1960s-era Higher Education Act to offer forgiveness to several categories of borrowers, marking a significant step towards implementing the announced loan cancellation sidestepping Congress following the Supreme Court’s rejection of the administration’s initial proposal last year.Biden’s New Student Loan Forgiveness Plan Estimated To Cost $84 Billion, Adding To The Already Massive $475 BillionCredit: Jack Marain/TheNews2 (Foto: Jack Marain/Thenews2/Deposit PhotosThe Biden administration has consistently canceled student loans using a variety of existing programs while also pursuing a broader one-time cancellation plan. This approach builds on a proposal that was struck down by the Supreme Court last year but utilizes different legal strategies.How Much Does It Cost?Depositphotos Photo by destinacigdemA recent analysis by the Penn Wharton Budget Model (PWBM) suggests that Biden’s new student debt relief plan could incur approximately $84 billion in costs if put into action. This amount is in addition to the $475 billion previously estimated for Biden’s prior SAVE plan.The report states “We estimate that the New Plans will cost $84 billion in addition to the $475 billion that we estimated for President Biden’s SAVE plan, for a total cost of about $559 billion across both plans.”The New Plans contain 5 main provisions#1 Waived Accrued and Capitalized InterestDepositphotos Photo by sponnerUp to $20,000 in interest  will be waived, irrespective of borrower’s income levels. Single individuals earning under $120,000 or couples earning under $240,000 annually are eligible for a complete waiver of all balances exceeding the initial balance under any Income-Driven-repayment (IDR) plan. No application is necessary as automatic relief will be applied.Estimated cost of $57.75 billion#2 Forgiving Student Debt For Borrowers In Repayment For 20 YearsDepositphotos Photo by WavebreakmediaThose who began repaying loans on or before July 1, 2005 (or July 1, 2000 for those with graduate debt) will have all undergraduate debt eliminated. No enrollment in IDR plans is necessary for this relief, although other application requirements for borrowers are yet to be clarified.Estimated cost of $19.07 billion#3 Automatic Debt ReliefDepositphotos Photo by SIphotographyAutomatically relieving debt for eligible borrowers not enrolled in specific forgiveness programs. Those who meet forgiveness criteria but aren’t enrolled will benefit from favorable repayment rules, including those of the SAVE plan or closed school discharge. No application is required as automatic relief will be applied.Costs already included as part of the prior SAVE loan forgiveness.#4 Assisting Borrowers From Low Value Programs or InstitutionsDepositphotos Photo by deagreez1Debt relief will be extended to those who accrued debt from programs or institutions that did not provide “sufficient value” in terms of post-graduation earnings.Not enough details have been provided by the administration to calculate the cost.#5 Loan Repayment HardshipsDepositphotos Photo by IvantsovRelief will be tailored to each borrower’s situation, though whether it will cover partial or full debt is unspecified. The department’s hardship proposal aims to provide loan cancellation to borrowers facing a high risk of loan default. Additional details are pending on this proposal.Breakdown of the Budget Cost EstimatesDepositphotos Photo by thenews2.comThe Penn Wharton Budget Model breaks down the budgetary impact of each of the 5 provisions including the number of individuals benefitting along with their average household income.One of the biggest criticisms of the New Plan is the benefit provided for about 750,000 households making over $312,000 in average household income. Ranking Member Cassidy Slams Biden’s Backup Student Loan SchemeDepositphotos Photo by f11photoSen. Bill Cassidy, R-La., the ranking member of the Senate Health, Education, Labor and Pensions Committee said, “The Supreme Court already ruled the Biden administration doesn’t have the authority to unilaterally take student debt from those who willingly took it on and transfer it to taxpayers who chose not to go to college or already worked to pay their loans off. Now, the Department of Education is completely rewriting the Higher Education Act piece by piece to resurrect this unconstitutional student loan scheme. Where is the relief for the guy who didn’t go to college but is working to pay off the loan on the truck he takes to work? What about the woman who paid off her student loans, but is now struggling to afford her mortgage? Instead, the Biden administration is sticking these Americans with the bill of someone else’s student debt.”Public Opinion Does Not Favor Biden On Student Loan DebtDepositphotos Photo by MuhammadAlimakiA new poll from the University of Chicago Harris School of Public Policy and The Associated Press-NORC Center for Public Affairs Research reveals that three in ten U.S. adults approve of how President Biden has handled student loan debt, while four in ten disapprove, with the remaining respondents either neutral or uncertain.The outlook is similarly bleak among those with unpaid student loans, whether for themselves or a family member.Court Challenges AheadDepositphotos Photo by slickspicsThe U.S. Supreme Court struck down a student loan cancellation proposal last year. The court determined that the post-9/11 HEROES Act, which permits the federal government to waive student loans during emergencies, was not designed to provide universal loan forgiveness.Utilizing a different legal basis, Biden Administration’s new proposal aims to forgive loans for over 25 million Americans. Opponents view it as unjust burden for taxpayers and have vowed to contest it legally.  Like Financial Freedom Countdown content? Be sure to follow us! Social Security Projected to be Insolvent by 2035, Medicare by 2036Depositphotos Photo by zimmytwsThe Trustees of Social Security and Medicare unveiled their yearly financial forecasts for both programs, looking ahead over the next 75 years. The newly released projections for Social Security paint a grim picture of rapid progression towards insolvency in 10 years, underscoring the urgent need for trust fund remedies to avert widespread benefit reductions or sudden adjustments in taxes or benefits.Social Security Projected to be Insolvent by 2035, Medicare by 2036 National Debt Exceeds Previous Projections, Signaling Troubling Times Ahead for the U.S. Economy as per CBO March reportDepositphotos Photo by izanbarThe Congressional Budget Office (CBO) performs nonpartisan analysis for the U.S. Congress. The latest Budget and Economic Outlook released March 2024, offered dire projections for the country’s fiscal and economic landscape over the upcoming decades. Unfortunately the national debt is higher than initially anticipated and is projected to hit $141 trillion by 2054.National Debt Exceeds Previous Projections, Signaling Troubling Times Ahead for the U.S. Economy as per CBO March reportThe 10 States Taxing Social Security in 2024 and the 2 That Just StoppedDepositphotos Photo by steveheapAs 2023 tax filing season draws to a close, retirees across the nation are adjusting their financial plans for 2024, but a crucial detail could drastically alter the landscape of retirement living: the taxing of Social Security benefits. While many bask in the belief that their golden years will be tax-friendly, residents in nine specific states are facing a reality check as their Social Security benefits come under the taxman’s purview. Conversely, a wave of relief is set to wash over two states, marking an end to their era of taxing these benefits. This shift paints a complex portrait of retirement planning across the U.S., underscoring the importance of staying informed of the ever changing tax laws. Are you residing in one of these states? It’s time to uncover the impact of these tax changes on your retirement strategy and possibly reconsider your locale choice for those serene post-work years. Here are the states taxing social security benefits.The States Taxing Social Security in 2024 and the 2 That Just StoppedTop 10 Cities Where Home Sellers Are Losing Big, With San Francisco Seeing 20% Take a Loss, Quadruple the National AverageDepositphotos Photo by appalachianviewIn San Francisco, a significant number of home sellers are experiencing financial losses at levels not seen in over a decade. This uptick in losses can be attributed to home prices normalizing after a period of steep increases. Currently, nearly 20% of sellers in the city are selling their homes for less than their purchase price, with average losses around $155,500. In contrast, the national scene is less bleak, with only 4% of home sellers across the United States facing losses, as home prices generally continue to hover near peak levels. The typical loss for those unlucky few is about $40,000. Redfin conducted an analysis of the top 50 metros to narrow down the cities where the seller sold the home for less than they bought it for. Here are the top 10 cities where home sellers are facing lossesTop 10 Cities Where Home Sellers Are Losing Big, With San Francisco Seeing 20% Take a Loss, Quadruple the National AverageRetire Abroad and Still Collect Social Security? Avoid These 9 Countries Where It’s Not PossibleDepositphotos Photo by gunnar3000Dreaming of retiring to a sun-drenched beach or a quaint village? Many Americans envision spending their golden years abroad, savoring the delights of new cultures and landscapes. However, an essential part of this dream hinges on the financial stability provided by Social Security benefits. Before packing your bags and bidding farewell, it’s crucial to know that not all countries play by the same rules when it comes to collecting these benefits overseas. Here are the nine countries where your dream of retiring abroad could hit a snag, as Social Security benefits don’t cross every border. Avoid living in these countries so your retirement plans don’t get lost in translation.Retire Abroad and Still Collect Social Security? Avoid These 9 Countries Where It’s Not PossibleAmericans Are Teetering on the Edge of Financial Strain As 1 in 5 Users Is Maxed-OutDepositphotos Photo by tonodiazIn its Quarterly Report on Household Debt and Credit for the first quarter of 2024, the New York Fed’s Center for Microeconomic Data highlighted a concerning trend: more borrowers are falling behind on credit card payments. 1 out of every 5 borrowers is maxed-out.Americans Are Teetering on the Edge of Financial Strain As 1 in 5 Users Is Maxed-OutJohn Dealbreuin came from a third world country to the US with only $1,000 not knowing anyone; guided by an immigrant dream. In 12 years, he achieved his retirement number.He started Financial Freedom Countdown to help everyone think differently about their financial challenges and live their best lives. 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Minimum investment is $5,000.Platforms like Yieldstreet provide investment options in art, legal, structured notes, venture capital, etc. They also have fixed-income portfolios spread across multiple asset classes with a single investment with low minimums of $10,000.