It’s not fair is it Democrats? A responsible person exhibiting the where-with-all, the responsibility to pay back an amount they borrowed especially when you’re trying to get your incompetents re-elected to Congress this November, [and not to mention you have mucked up every public policy decision since dumbass was elected President in 2020]? Oh my God I’ve never seen anything like these Socialists pulling out all the stops regardless if it ultimately harms the general public by raising taxes and college costs going forward. But as long as a few more of their Socialists can get re-elected then to Democrats anyway, wrecking the U.S. economy long term is no problem right? Insanity!

Are you aware that the IRS has had a long standing rule that debt relief is a taxable event? It’s considered taxable income to the recipient of such relief. So let’s say, and this actually happened, during the financial crisis of 2008 you were one of millions of Americans who lost their job and could no longer pay the mortgage. Effectively, they walked on a property when their mortgage balance at the time was $200,000. The bank doesn’t want the property back, they want them to pay off the mortgage balance but they are not able [or are at least protesting]. So the property goes into foreclosure or a short sell situation. It matters not if the property sells to a new buyer, there’s still an outstanding debt that has to be settled. If the debtor on the mortgage was relieved of the debt by law it is considered taxable income [in the amount of the debt], in this case $200,000. [In other words, you’ll be issued a 1099-something that shows you benefited in the amount of effectively phantom income of $200k]. Not pretty for those defaulting on loans. However, because of the severity of the situation back in 2008, partial debt relief was probably wider spread than what some of us might imagine, plus the Socialist, Barack Obama, was in the White House at the time. I remember having a couple clients that walked on their mortgages back then but the reasons were that they needed to relocate to others states for a new job [or family] and simply could not sell their current property because there were no buyers. One was in Maryland and had to move to Texas and the other was in California and relocated to Nevada. I know at least one of them had to pay a negotiated settlement amount to be legally relieved of the mortgage obligation, their property did sell but for a much lower price point, probably even a loss. Still, it was reasonable as each party split a share of that loss. However, what you need to know is that consumer debt relief in general is a taxable event in accordance with IRS rules. [Note: Up to 13 states retain the power to impose state income tax on any student debt relief received by their residents due to this new act.]

That brings me back to the subject, student loan debt has skyrocketed for years now, this is not a new concern, not new, not at all. There exists around $2 trillion in student debt in this country today. Meanwhile, do you think these major educational institutions have cut their own spending? Or lowered professor salaries ever? Not a chance! They don’t care and the reason they don’t care is the fact that through these government loans and grants the money keeps pouring in, so why would they have any incentive to cut their own costs, or the cost of tuition? Never. This new student debt relief act that Joe Biden just signed is going to do nothing but add to future college tuition costs since now these institutions are free to once again raise tuition and fees because the federal government has just excused $10-20K of each student’s debt. So still not the individual institution’s problem right?

This is a terrible move, placing incentives in higher education institutions to raise their tuition and fees at a time when they should be lowering them, and lowering the salaries they pay to their professors to bring down costs where it’s badly needed. Most Americans today cannot afford to send their children to college. I paid for most all of my education, I did receive a little help [not much] but I am still grateful today. And many programs offered by these institutions are not degrees anyone can immediately earn a decent living once received. I have written about this fact many times before; in America, if a student’s major is not in the disciplines of engineering, law, medicine, or accounting & finance the chances of finding relevant well-paid work right out of college is almost nil. You would have been way better off pursuing trade school. This is today’s America, where you can easily chalk up $100,000+ in debt by earning a super-fluffy degree plan and still be forced to live at home with your parents well into your 30’s.

These Democrats wrote into this bill that any tuition debt cancellation as a result of this new act will not be considered taxable income to the recipient, isn’t that thoughtful? How about those people that never went to college, shouldn’t they receive a check for at $10,000 for having the intelligence not to spend four years on a fluffy degree plan administered by a “woke” leftist institution? I think they well should! And by the way here’s a reminder – NEVER VOTE FOR LOUSY RESULTS IN LIFE, NEVER VOTE DEMOCRAT!

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