No relief? Romney, 4 Republican senators move to stop Biden from loan forgiveness

Conservative leaders push new Student Loan Accountability Act, saying Biden's plan won't help most Americans during time of inflation.
By: | May 19, 2022
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As the President and Democrats seek potential financial relief for student loan borrowers, the right is stiffening its position to prevent it.

Mitt Romney (R-UT) and four other Republican Senators have introduced new legislation to try to stop the Biden Administration from canceling student loan debt, saying it would cause inflation to rise further and be unjust to those who paid into the system or did not attend college.

Senators Richard Burr (R-NC), Tim Scott (R-SC), Bill Cassidy, M.D. (R-LA), and Thom Tillis (R-NC) joined Romney in crafting the Student Loan Accountability Act, which would effectively halt any attempt by the President to push through a relief package. While there are 43 million Americans who owe a combined $1.7 trillion, hundreds of millions don’t. And borrowers have been granted several stays over the course of the COVID-19 pandemic on payments. The latest is set to expire on Aug. 31.

“Why should a woman who is working to make ends meet have her tax dollars go to a person who went to law school?” Cassidy said. “President Biden’s plan is completely unfair to the average American who chose not to attend college.”

Biden hasn’t put forth a plan yet, though he has hinted he might look at wiping out $10,000 for the majority of borrowers. He has not publicly stated he would cancel all debt, though others on the left including Sen. Elizabeth Warren and Sen. Majority Leader Chuck Schumer would like to see as much as $50,000 canceled. Yet, Republican senators pushed extreme numbers in the release of their plan.

“It makes no sense for the Biden Administration to cancel nearly $2 trillion in student loan debt,” Romney said. “It would be wildly inflationary at a time of already historic inflation. Democrats and Republicans alike have called on the President to not take this unwise step and pile more onto our $30 trillion national debt. And while the President’s legal authority in forgiving this debt is dubious at best, our bill would ensure that he would be prevented from taking action.”

They said the Act would disallow the three major Departments—Education, Justice and Treasury—from trying to “cancel or forgive the outstanding balances, or portions of balances, of covered loans.” However, they would allow exemptions for certain loan forgiveness in programs already in place under the Higher Education Act, including Public Service Loan Forgiveness and Teacher Loan Forgiveness.

The Senators all took their shots at the plan, mostly targeting rising costs affecting Americans as the reason for denouncing loan forgiveness.

  • Burr: “Working Americans are struggling to afford essentials like gas and groceries under the worst inflation in 40 years, but that won’t stop the Biden Administration from pushing more inflationary policies that primarily benefit the highest earners. Taxpayers who did not attend higher education or paid off their student loans responsibly should not be footing the bill for those who didn’t.”
  • Tillis: “President Biden’s misguided and poorly targeted plan to cancel student loan payments will only hurt Americans. Instead, we must address the root causes of the rising cost of higher education … to prevent [Biden] from causing more irreparable damage.”
  • Scott: “Prices continue to soar, thanks in large part to government spending. Canceling trillions of dollars in student debt would only exacerbate inflation and further harm the very individuals this administration claims to fight for. It’s time President Biden took our economy seriously, and he can start by getting rid of this misguided plan.”

They cited several statistics in their reasoning for canceling debt, among them that the nonpartisan Committee for a Responsible Federal Budget said it would make the inflation rise between another 4% and 20% and that the wealthiest borrowers would benefit the most (from a Brookings Institution study). But one of the most notable was that they said it would give colleges and universities a reason to raise tuition, though they did not cite any sources to back the statement.

“Not only is that patently unfair, it doesn’t solve the root problem,” Burr said. “Canceling student loan debt unilaterally will only encourage colleges and universities to further increase tuition and encourage future borrowers to take out even riskier loans. Congress must pass the Student Loan Accountability Act to make it clear this legally dubious and undeniably damaging proposal from the Administration cannot stand.”