On Wednesday, President Biden announced he will be "cancelling" $10,000 in outstanding federal student loan debt for millions of Americans, $20,000 for Pell Grant recipients, and extending the pause on payments through December 31, 2022. As a result, taxpaying Americans, many of whom never went to college or paid back their loans in full, will be stuck with a tab of hundreds of billions of dollars.
Every month loan payments are on pause costs the taxpayers $4.3 billion, and no borrower has been required to pay a dime on federal student loans since the beginning of the pandemic, over two years ago. According to the Penn Wharton Budget Model, 70 percent of relief will be enjoyed by the top 60 percent of earners. In total, the cancellation, combined with the extension of the payment pause and an "income-driven repayment plan" proposal, is estimated to cost in the neighborhood of $500 billion, adding to our national debt and deficit.
While consumer prices rise at 40-year highs, these inflationary policies are indefensible. Why is the upper echelon of income-earners benefitting at the expense of working-class Americans?
Aside from the economic implications of such a decision, President Biden's move raises serious concerns regarding the powers designated to the Executive Branch under the Constitution and the President’s legal authority to implement this policy. Through past executive actions, however, President Biden has demonstrated that he's willing to convolute the rights of the Oval office to score a political victory.
As of last year, the Speaker of the House, Nancy Pelosi, agrees. In July of 2021, Speaker Pelosi declared, "People think that the President of the United States has the power for debt forgiveness. He does not. [...] That has to be an act of Congress.” In light of President Biden's blatant executive overreach, I signed a letter to the Speaker asking for her to act in defense of our Constitution and the powers of the legislative branch.
Additionally, I introduced the Fairness for Responsible Borrowers Act to protect Americans from this shortsighted policy by clarifying that the President does not have the authority to unilaterally cancel student loan debt without Congress. Americans who did not opt to take out debt or paid theirs back in full should not be held liable for the student loan payments of millions of Americans nationwide.
