Q: What’s your opposition to the Biden administration’s student debt forgiveness policy?
A: For starters, the Biden administration’s nearly $1 trillion plan is fiscally irresponsible and follows a trail of partisan binge spending that will make it even harder for the Federal Reserve to rein in inflation. The price tag is particularly reckless when taking into account the unprecedented $31 trillion national debt that will drag down economic growth unless Washington gets its fiscal house in order. Don’t forget, wiping away student debt for 40 million borrowers doesn’t magically erase their debt into thin air. It transfers the burden to the taxpaying public, on the backs of those who paid their own way through college and on the shoulders of the majority of Americans who did not get an advanced degree. Certain borrowers earning as much as $250,000 a year could be eligible to receive up to $20,000 in student debt forgiveness under the proposal. With the stroke of a pen, President Biden reached beyond his constitutional authority, reminiscent of former President Obama’s declaration – “I’ve got a pen, and I’ve got a phone” – to sidestep Congress. The president’s overreach has landed at the U.S. Supreme Court thanks to our system of checks and balances. The ultimate question before the high court is whether the president of the United States has unilateral authority to forgive half a trillion dollars in loans without congressional approval. Article I of the Constitution vests the power of the purse and legislative powers in Congress; Article II makes clear the President must “take Care that the Laws be faithfully executed.” Unchecked executive power flouts the separation of powers.
Make no mistake. This misguided policy is a slippery slope that would pave the way for even more brazen overreach from the executive branch, including future administrations of either political party. That’s why I joined Sen. John Thune to keep the administration in check. We introduced the Stop Reckless Student Loan Actions Act to block President Biden’s effort to unilaterally cancel student loan debt and transfer the loans to the taxpayer. This blatant power grab is unaffordable and unfair. What’s more, it won’t curb soaring tuition costs in America. To the contrary, it would give institutions of higher education the green light to keep raising tuition from one year to the next as well as raise expectations among future student borrowers that their debts will be forgiven.
Q: What can be done to help families navigate college financial aid?
A: At my county meetings across the state, I regularly hear from Iowans about the soaring costs of higher education and the confusing thicket of financial aid forms and packages. I’m working to help bring transparency and clarity to this process for Iowa families so they can understand at the front end what they are signing up for on the dotted line, so student borrowers don’t get in over their heads. I teamed up with Sen. Tina Smith of Minnesota to introduce a trio of bipartisan bills that would help prospective and current college students become better informed about financial aid offers and borrowing decisions. Our bills would improve transparency in the loan process so students can compare dollar for dollar what makes the most sense for their futures, as well as hold colleges accountable for the way they present financial aid offers to students. Here’s how:
The Net Price Calculator Improvement Act would beef up the online tool to provide students with early, individualized estimates of higher education costs and financial aid figures before they decide where to apply.
The Understanding the True Cost of College Act would create a universal financial aid offer letter and standardize the terms used to describe financial aid. These reforms would allow students to compare financial aid packages between schools, rather than the current system where colleges use different terms, calculate cost differently, and often drastically understate their costs. In fact, according to an audit by the Government Accountability Office, more than 90 percent of college financial aid offer letters low ball the costs students would pay. That’s wrong. Sen. Joni Ernst is an original cosponsor of our bill and I also joined her to introduce the Student Transparency for Understanding Decisions in Education Net Terms (STUDENT) Act that would require student loan applicants receive an estimate of the total interest they would be scheduled to pay over the life of the loan before they take the loan.
The Know Before You Owe Federal Student Loan Act would reform the Higher Education Act to strengthen loan counseling requirements for institutions of higher education. For example, our bill would make loan counseling an annual requirement before new loans are disbursed, comparing a student’s borrowing to likely salary so students can make sensible decisions on the front end rather than being surprised by their debt burden after graduation. In addition, our bill puts students in the driver’s seat, giving them the keys to decide how much they would like to borrow, rather than offering the maximum possible loan amount as the default option. Rep. Mariannette Miller-Meeks introduced the companion bill in the House of Representatives. These bipartisan, bicameral bills would add stronger financial literacy tools to the tool box to help prevent student borrowers from getting bogged down with debt they can’t afford to repay.