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September 2, 2022
Dear John,
The Decision to Eliminate Debts
Many have heard about the Biden Administration’s plan to cancel $10,000 of student debt per borrower for individuals who make up to $125,000 annually or households making $250,000 or less annually. I understand the public concern about higher education affordability and the desire to help struggling Americans. Unfortunately, President Biden‘s loan forgiveness plan doesn’t meaningfully address either of those issues. In fact, it will likely make them worse.
Higher education inflation over the past two decades shows us that loan forgiveness will likely make college even less affordable in the future. Colleges understand they can raise tuition even higher and still find plenty of individuals and families willing to borrow more money to finance the education. Student loan forgiveness will only make that problem worse.
Additionally, this plan does not only target the most needy Americans—just look at the Administration’s plan—a family making $250,000 a year still qualifies for this giveaway. More than 70% of the benefit goes to the richest 60% of Americans.
Jerry, a South Dakotan, told me recently that his daughter Emily worked hard throughout college to pay off her student loans. She worked nights and weekends during school and picked up extra hours after graduation and even picked up a second part-time job. She and her family shortened or skipped family vacations, limited or postponed purchasing decisions for their home and family, and passed on fun entertainment or sporting events. The Biden Administration’s plan to cancel $10,000 of debt for people who have not acted similarly to pay off their debts is a slap in the face to folks like Emily. She took full responsibility for her loans and paid them off quickly – through hard work.
Most Americans do not have a college degree. Forcing those who passed on college to foot the bill for a payout to individuals who statistically have a higher earning potential with their degree is irresponsible and an unfair use of taxpayer dollars.
I am co-leading two bills that would prohibit massive student loan forgiveness by the federal government:
- The Stop Reckless Student Loan Actions Act would end the suspension of repayments on qualifying federal student loans, following two years of non-payment and seven executive actions extending the payment pause. My bill would prohibit the president from canceling outstanding federal student loan obligations due to a national emergency.
- The Can't Cancel Your Own Debt Act would prevent Congress from implementing bills that let U.S. Senators and Representatives off the hook for personal debts.
If our government sets a precedent to forgive the debts of private citizens that they chose to incur, individuals will be incentivized to take on more debt. College may become more expensive, or the government may continue bailing individuals out—creating a bigger burden on American taxpayers, including the 60 percent who do not have a bachelor’s degree. The government needs to stop printing money. Increased spending in the current high-inflationary economy has real, negative impacts on American taxpayers that are struggling to make ends meet.
When you borrow money, the expectation is—and should be—that you pay it back. Even if it requires hard work.
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