While rising prices due to inflation are crushing American families, employees, and businesses, President Biden has said he will soon make a decision on whether or not to "forgive" outstanding federal student loan debt. This decision will affect more people than just those who currently hold the debt.
As our nation is already in a tumultuous time, the President canceling any or all student loan debt would intensify the many crises we face. If President Biden were to sign off on $10,000 per borrower in student loan forgiveness, the Committee for a Responsible Budget estimates the total cost will be $250 billion, and it is the American taxpayers, many of whom paid off their loans or never attended college, who will be picking up the tab. This comes after taxpayers have been stuck with a bill of $4.3 billion per month thanks to the President’s decision to extend the COVID-era freeze on federal student loan payments through August 31, 2022.
Further, while inflation weakens the dollar at a rate of 8.5 percent, a one-time injection of hundreds of billions of dollars would leave our economy in a worse position in the short and long-term. The economic consequences of widespread student loan forgiveness would further hinder small businesses and workers while they are stuck facing the brunt of a recession, historic inflation, and a worker shortage.
Aside from the economic implications of such a decision, this move would raise serious concerns over the President's authority, or lack thereof, to unilaterally cancel student loan debt.
President Biden has already shown that he has no reservations about issuing orders outside of the jurisdiction of the Executive Branch. For example, last year, the President issued an eviction moratorium to block landlords from evicting tenants due to COVID-19, but the order was struck down by the Supreme Court. Prior to the Court ruling, however, President Biden admitted “it was not likely to pass constitutional muster”.
Much like the eviction moratorium, President Biden would be skating on thin Constitutional ice by following through with widespread student loan forgiveness.
In response to the President's insistence to forgive loans, I introduced the Fairness for Responsible Borrowers Act to clarify that the Biden Administration and future administrations do not have the authority to unilaterally forgive student loans. If President Biden wishes to add even more to our national deficit to forgive federal student loan debt, he must come to a legislative agreement with Congress, as our Founding Fathers intended.
By moving to cancel student loan debt, the President would be sending a message to the world that America rewards financial irresponsibility. As an alternative to four-year university, I’ve long promoted apprenticeships and career and technical education, which offer job security, high income, and less debt. I strongly urge the White House to join me in emphasizing different educational paths to assist students in making the most responsible decision for a financially sound future.
