The Biden administration has framed its student loan bailout plan as a way to help bring relief to middle and lower-class Americans saddled with debt.
“Many people — many people can’t qualify for a mortgage to buy a home because the debt they continue to carry,” he said in remarks announcing the plan.
“A lot of folks are even putting off starting families because of the cost. And the dream of starting or owning your business is just way off in the distance with a debt that’s — that so many are saddled with,” Biden added.
But now that the plan is inching closer to reality, what are recipients actually planning to do with this newfound “breathing room”?
According to a recent survey, a majority of them—73 percent—plan to spend their new monthly savings on travel and dining out.
Any day now, federal student loan borrowers throughout the U.S. could see their balances reduced by up to $20,000 thanks to President Biden’s student debt forgiveness plan. The administration is waiting on a green light from a federal judge to actually start reducing balances, but still says applicants can expect good news in the coming weeks.
While recipients won’t see that aid in the form of a check, any remaining balances will be re-amortized, meaning monthly payments will be recalculated to reflect the new balance. For borrowers, that means monthly payments could drop by up to $300 per month.
That extra cash will be a much needed lifeline to cover other bills or necessary expenses for many. But some borrowers plan to spend the money more freely.
In fact, 73% of anticipated recipients say they expect to spend their debt forgiveness on non-essential items, including travel, dining out and new tech, according to a recent survey from Intelligent.com. (CNBC)
CNBC reminds readers they can’t be judgmental, though: “Both your personal spending habits and how you view the morality of debt are nobody’s business but your own.”
Hardworking taxpayers footing the bill, however, may beg to differ.