There is No Such Thing As Student Loan Forgiveness
President Joe Biden issued an Executive Order this week to transfer $500 billion of student loan debt onto the American taxpayers over the next ten years and extended the freeze on student debt repayments until January 2023, costing the taxpayers $5 billion per month.
Each person making less than $125,000, will have up to $10,000 of debt forgiven. Those who used Pell grants will be granted up to $20,000 in debt forgiveness. The colloquial term “forgiveness,” however, is a lie. It is impossible to make debt magically disappear. Every American will now be responsible for those debts, regardless of if he or she went to college, repaid his or her loans, worked through college to avoid loans altogether, or had a family member scrimp and save to afford the tuition.
Many folks are understandably incredibly frustrated to be stuck with the bill for the decisions of others. One parent called my office in tears to share her story of sacrificing for years to provide for her daughter’s education. She told my staff how she felt like she has been punished for doing the right thing. Many families feel the same way she does, and for good reason.
In Arkansas, only 13% of the state’s population holds student debt. How is it fair that Arkansans who responsibly paid off their debt, choose a cheaper college, or choose a career path that does not require a college degree are now footing the bill for those around the country who knowingly took on debt?
Moreover, this Executive Order is a handout to the wealthy and educated while costing all Americans heavily in taxes. According to a recent analysis from the University of Pennsylvania, more than two-thirds of the debt forgiveness would benefit the top 60% of earners, considering the median income in the U.S. is below $70,000. We can all agree that college is outlandishly expensive, but debt “forgiveness” only feeds the problem.
Beyond the questionable merits of this damaging plan, blanket debt cancellation was never supposed to be within the power of the President of the United States. Speaker of the House Nancy Pelosi emphatically said as much in a July 2021 press conference. She said plainly, the President “does not have the power” to cancel federal student loan debt, and it “has to be an act of Congress.” That is why I joined nearly 100 Republicans in sending a letter to Speaker Pelosi demanding an answer for this hypocrisy and calling on her to hold President Biden accountable for this $500 billion handout. Clearly, she agrees with Republicans that this is extreme government overreach and should be reversed immediately.
Americans will not forget President Biden’s favoritism towards his wealthy, educated base. It is shameful to punish Americans who made fiscally responsible education choices in favor of the minority who willingly took on debt, agreed to the repayment terms, and now have changed their minds. I will continue to fight against this government overreach and the spending that harms every Arkansan.