There are few policy proposals more backward than President Biden’s and House Speaker Nancy Pelosi’s farce of “canceling” student loan debt. Debt cannot be “canceled” or erased — it can only be shifted to someone else.
Truck drivers, farmers, bartenders, electricians and plumbers shouldn’t have to pay for someone else’s degree. Those who have sacrificed and worked hard to pay off their own student loans shouldn’t then have to take on someone else’s debt. But that is exactly what Mr. Biden’s plans would force hardworking Americans to do.
“Canceling” student loan debt helps the wealthiest Americans at the expense of working families. The wealthiest 40% of American households hold almost 60% of public student loan debt, and if Mr. Biden “cancels” student loan debt on any scale, upper-income Americans reap the benefits. A huge amount of student loan debt is owed by those with post-graduate degrees, and many can afford to pay their loans back over time. Yet, the Biden administration is insistent on forcing those who didn’t take on debt, or have already paid theirs back, to unfairly foot this trillion-dollar-plus tab. Who are Mr. Biden and Mrs. Pelosi trying to help? Follow the money — they’re giving a handout to the ultra-wealthy.
Think about the precedent that forgiving student loan debt sets — this won’t be a one-time occurrence. This will incentivize students to take on more debt, knowing someone else will ultimately pay it back, driving up tuition rates and perpetuating the accumulation and cycle of debt instead of breaking it. Let’s say Mr. Biden canceled $10,000 in student loan debt per borrower today. Conservative projections show that it would only take four years for borrowers to rack up another $1.6 trillion in student loan debt — the current outstanding balance that Mr. Biden is proposing to forgive. Where does debt forgiveness end? What is to stop Mr. Biden from signing an executive order shifting someone’s credit card debt, mortgage or car payment to other taxpayers?
Mr. Biden’s timing for this proposal couldn’t be worse — this will cost taxpayers hundreds of billions of dollars in the middle of the highest inflationary period in four decades. American families are worried about paying for gas and groceries due to wasteful spending and misguided economic policy; this new spending will fan the flames of inflation and drag our economy even further down.
Instead of spending even more money we don’t have and throwing taxpayer dollars down the drain, the Biden administration should work with Congress to address challenges in our education system and career pipeline. Not only is higher education too expensive, but it is also wrong to steer people toward costly degrees instead of incentivizing trade schools and apprenticeship programs that allow students to graduate without debt and with well-paying career opportunities. By canceling student loan debt, the Biden administration will further drive up the cost of tuition and unfairly punish those who have chosen a path in the trades.
As working families struggle with inflation, this proposal could not be more out of touch. That’s why I’m standing up for Iowa families and working to block it. I helped introduce the Student Loan Accountability Act, legislation that would prohibit the administration from shifting student loan debt to taxpayers. I have also signed onto the Can’t Cancel Your Own Debt Act, legislation that would disqualify Members of Congress from participating in federal programs enacted during their time in Congress to “cancel” their own student loans. And I’m working to promote career and technical education and upskilling options to encourage students and workers to choose the best career path for them.
I will continue to remind Mr. Biden and Mrs. Pelosi that student loan debt can’t be canceled or forgiven; it can only be transferred to someone else. Iowa families already have high enough bills of their own to pay thanks to the Biden administration’s economic incompetence — they don’t need to pay off someone else’s bills too.