Biden’s Student Loan Bailout: Costly, Shortsighted, and Wrong
By Sen. John Thune
President Biden and Democrats’ reckless spending knows no bounds. In August, President Biden announced his nearly trillion-dollar student loan bailout. His plan has two parts: canceling up to $10,000 in federal student debt ($20,000 for Pell Grant recipients) and revamping the Income-Driven Repayment (IDR) program. These proposals do nothing to address the root cause of soaring college costs, but the price tag threatens to drive up inflation for all Americans and could lead to higher college costs.
The president claims mass debt forgiveness is warranted to make borrowers whole after the pandemic. The reality is that Americans with college degrees have fared well recently, experiencing employment and wage growth, and borrowers with federal student loans haven’t had to pay a nickel in three years. Now the president wants American taxpayers to foot the bill for a misguided bailout that simply transfers student debt from those who voluntarily took on the debt to the backs of taxpayers, including those who didn’t go to college, already paid off student loans, or scrimped and saved to put themselves or their kids through school. On top of that, he envisions transforming the IDR program from a program designed to help borrowers pay back their loans based on their income into another form of loan forgiveness with the average borrower paying back only 50 percent of their total loan.
No one disputes that a college education is valuable and a good investment for many Americans. But it’s an investment and it should be treated as one. While some Americans may choose to invest in a college degree, others may choose to seek another professional credential or learn a trade. These Americans shouldn’t be forced to pay for the decisions of others who choose higher education, take out student loans, and agree to pay those loans back.
Recognizing that college is costly and many young professionals have loans to pay back, there are things we can do to help pay off loans without putting taxpayers on the hook. My bipartisan Employer Participation in Repayment Act became law in 2020 and has been extended through 2025. It allows employers to make tax-free payments toward their employees’ student loans. It’s a win-win: Employees get help paying off their loans and employers have another option to attract and retain talented workers. It’s no silver bullet, but it helps ease the burden of student debt without transferring it to taxpayers.
President Biden’s student loan bailout is costly, unfair, and shortsighted. The president is putting taxpayers on the hook for a nearly trillion-dollar giveaway to college-educated Americans who are often better off than many of the Americans who would shoulder the burden of their debts under the president’s plan. There are actions we can take to ease the burden of college costs without needlessly spending taxpayer dollars. This is another disastrous economic plan from the Biden administration and American taxpayers will pay its true cost.
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Agree with Senator Thune.
Why all the clamor about forgiving student loans when the PPP was the biggest grift since big finance got bailed out since 2008?
25% of our debt came during the last administration and now they are concerned. Crocodile tears.
This is the only new form of revenue the federal government has received in 30+ years. Apparently, what John is saying is that it is easier to accept and implement a generational tax, than it is tax corporations or his own boomer generation. It is great his generation got through college before the government backed loans allowed universities to charge $100k+ for a degree, but most good paying positions require a degree, and the interest for loans is up to 9%. Good luck paying back $150K loans @ 9% with a teachers salary.
A vote for John and his party is a vote to tax everyone except boomers and corporations. I am not on board with this, and may be considering a vote for democrats if they leave this problem just hanging.
Almost everyone agrees that the problem is higher education tuition and other costs have risen much faster then the rate of inflation over the past 2 decades. How does forgiving $10,000/$20,000 of student loans to cover those skyrocketing costs provide any part of a solution to the basic problem?
It doesn’t solve it, only Congress can reduce interest or cap the amount. If you look who made this post, that is the problem, not the $10k Biden wanted to forgive. John and the rest of the GOP need to accept boomers are not the majority of voters anymore. The issue will eventually be addressed when the GOP realizes this is a losing issue for them long term. You want more of a baby boom, maybe don’t load up college graduates with so much debt they abstain from starting a family? The boomers are the most selfish generation in the history of this country.
Reply to 1:40pm comments.
Let’s analyze your comments.
1. Higher Ed is ever more expensive.
2. Students agree to borrow money for the cost.
3. Your winning solution-Mass distribution of government checks to buy votes. Winning strategy? Yes, if we continue on the road to socialism.
When did the American people decide to bail out Airlines, Banks, and Car Manufacturers? Why should my taxes have been spent as completely forgivable loans so Tom Brady, Oprah, Kanye, and others can stuff their pockets as part of the PPP scam?
Mr. Held-you are “bat-shi-” crazy by drinking the GOP Kool Aid too much! Always a friend of rich taxpayers and business, you and fellow GOP colleagues always stand ready to “bail-out” business and banks (as Anonymous above points out), who somehow got “too big to fail” and we gave billions (perhaps trillions) to keep them around and whole! Not to mention trump’s tax cuts to the rich who for sure didn’t need them to live a lavish, luxurious lifestyle easily. No, John Thune is just whistling pass the graveyard at midnight with his and other GOP stances on this issue.
And your remark on “socialism”—you don’t recognize socialism in your party’s stand for business $$$ freely given to Ag and farming, tourism, militarism as being socialism? Well, many of us know when the kettle is black-it’s black, fella!