It looks like President Joe Biden is getting closer to a decision on student-loan forgiveness, and a lot of Republican lawmakers are worried.
After a speech on Ukraine aid on Thursday, Biden told reporters that he was “in the process of taking a hard look at whether there will be additional debt forgiveness,” adding that he’d “have an answer for that in the next couple of weeks.”
While he said he was “not considering” $ 50,000 in relief for every federal borrower an amount a number of progressive lawmakers were pushing for Biden’s latest comments suggested that there could be some amount of student-loan relief on the way. His remarks made it seem like it could be implemented before the most recent extension of the payment pause, through August 31, expires.
This relief is something Republican lawmakers would rather not see carried out. Since the beginning of the year, Republicans have grown increasinglyvocal in their criticism toward broad student-loan forgiveness. Virginia Foxx, the top Republican on the House education committee, has released multiple statements that criticize broad relief, citing the cost to taxpayers that the previous payment-pause extensions have had. A number of her colleagues have joined in on that criticism, calling the relief a handout that will benefit the highest earners.
“Taxpayers have been footing the student loan bill for graduate students and Ivy League lawyers to the tune of $ 5 billion every month while their wallets are being drained by skyrocketing inflation,” Foxx said in a statement earlier this month, referring to the lost revenue to the government during the pandemic-related payment pause for federal borrowers. “The arrogance of this administration is astonishing, and the disrespect to our democratic system and the oath of office President Biden took to the American people, over half of which do not benefit from holding a college degree, is outright despicable.”
Here’s what else they’re saying, and how Democrats are responding.
GOP worries of moral and economic cost of student-loan relief
A common argument Foxx and her colleagues have used is that forgiving student debt would be an attempt by Biden to win votes.
In a Twitter thread criticizing broad relief, Arkansas Sen. Tom Cotton wrote that “Biden wants to raid the treasury to bribe his progressive base to turn out for the midterms.”
Utah Sen. Mitt Romney also called it a “bribe” on Twitter: Other bribe suggestions: Forgive auto loans? Forgive credit card debt? Forgive mortgages? And put a wealth tax on the super-rich to pay for it all. What could possibly go wrong?
In response to Romney’s comments, Massachusetts Sen. Elizabeth Warren a leading lawmaker pushing for loan forgiveness told Insider, “Is that the same Pandora’s box that you think was opened up by having public K through 12? We give our children an opportunity to get an education for free across this country, because we “know that investing in our future citizens and our future workforce is good for the entire country. Student-loan debt is not the same as credit-card debt, mortgage debt, or any other debts. That is good for our whole nation.”
The debate surrounding the economic effect of student-loan relief remains controversial. The Committee for a Responsible Federal Budget wrote in an August report that the student-loan moratorium should end, saying it had cost the government $ 52 billion annually. It also reported that broad cancellation would be poor economic stimulusin that it would put $ 90 billion per year back into the economy, but would cost the US government $ 1.5 trillion in uncollected loan repayments.
Democrats and left-leaning experts have argued the opposite, saying that if borrowers no longer have a monthly bill, they can use that money to boost the economy. A 2018 paper from the Levy Economics Institute of Bard College found that broad debt cancellation could boost real gross domestic product by an average of $ 86 billion to $ 108 billion per year, and a report from the Roosevelt Institute found that the relief would benefit low-income earners most.
It remains to be seen how Biden will decide to carry out relief, but it is clear that both sides of the aisle have ideas on what it should look like.