Scott, Romney Introduce Bill to Prohibit Inflationary Student Loan Debt Cancellation
WASHINGTON – Today, U.S. Senator Tim Scott (R-S.C.) joined Senators Mitt Romney (R-Utah), Richard Burr (R-N.C.), ranking member of the Senate Health, Education, Labor and Pensions (HELP) Committee, Bill Cassidy, M.D. (R-La.), and Thom Tillis (R-N.C.) in introducing the Student Loan Accountability Act, legislation to prohibit the Biden administration from cancelling student loan debt, a move which would add up to $1.7 trillion to the national debt, further fueling inflation.
“Prices continue to soar, thanks in large part to government spending. Cancelling trillions of dollars in student debt would only exacerbate inflation and further harm the very individuals this administration claims to fight for,” said Senator Scott. “It’s time President Biden took our economy seriously, and he can start by getting rid of this misguided plan.”
“It makes no sense for the Biden Administration to cancel nearly $2 trillion in student loan debt. This decision would not only be unfair to those who already repaid their loans or decided to pursue alternative education paths, but it would be wildly inflationary at a time of already historic inflation,” Senator Romney said. “Democrats and Republicans alike have called on the President to not take this unwise step and pile more onto our $30 trillion national debt. And while the President’s legal authority in forgiving this debt is dubious at best, our bill would ensure that he would be prevented from taking action.”
“Working Americans are struggling to afford essentials like gas and groceries under the worst inflation in 40 years, but that won’t stop the Biden Administration from pushing more inflationary policies that primarily benefit the highest earner,” Senator Burr said. “Taxpayers who did not attend higher education or paid off their student loans responsibly should not be footing the bill for those who didn’t. Not only is that patently unfair, it doesn’t solve the root problem. Canceling student loan debt unilaterally will only encourage colleges and universities to further increase tuition and encourage future borrowers to take out even riskier loans. Congress must pass the Student Loan Accountability Act to make it clear this legally dubious and undeniably damaging proposal from the Administration cannot stand.”
“Why should a woman who is working to make ends meet have her tax dollars go to a person who went to law school,” said Dr. Cassidy. “President Biden’s plan is completely unfair to the average American who chose not to attend college.”
“President Biden’s misguided and poorly targeted plan to cancel student loan payments will only hurt Americans, especially those who have already paid off their loans or decided not to pursue higher education,” said Senator Tillis. “Instead, we must address the root causes of the rising cost of higher education, and I am proud to introduce this legislation with my colleagues to hold President Biden accountable and prevent him from causing more irreparable damage.”
The real impact of cancelling student loan debt:
- Increases inflation rate forecasts between 4 percent and 20 percent, forcing millions of families that hold no student loan debt to suffer higher inflation, according to the Committee for a Responsible Federal Budget.
- Worsens inequality since nearly one-third of all student debt is owed by the wealthiest 20 percent and only 8 percent is owed by the bottom 20 percent, according to a Brookings Institution study.
- Incentivizes colleges and universities to raise tuition.
Grows the Biden Administration’s national debt balloon after already extending the student loan repayment pause, which would add $5 billion each month to the national debt in addition to nearly $100 billion already added in FY2020 and FY2021.
- Rewards Washington, DC residents more than any other area as their average borrower owes nearly $55,000, the highest in the nation.
The Student Loan Accountability Act:
- Prohibits the Department of Education, Department of Justice, and the Department of Treasury from taking any action to cancel or forgive the outstanding balances, or portions of balances, of covered loans.
- Includes exemptions for existing targeted federal student loan forgiveness, cancellation, or repayment programs currently in effect under the Higher Education Act, such as the Public Service Loan Forgiveness and Teacher Loan Forgiveness programs.
Read full text of the bill here.