President Biden and Vice President Kamala Harris were visiting Wisconsin and Pennsylvania, respectively, Monday to tout multi-billion-dollar giveaways to tens of millions who took out loans to pay for college — earning blowback from congressional Republicans who say the scheme could cost US taxpayers more than half a trillion dollars.
The White House announced a new student loan plan that would cancel debt for 4 million borrowers, provide $5,000 in debt relief to more than 10 million and cut any accrued interest for another 23 million borrowers.
“Thanks to our unapologetic commitment to provide relief to as many borrowers as possible as quickly as possible, our regulatory efforts would help tens of millions more borrowers find financial breathing room—and help fix our country’s broken higher education system,” Education Secretary Miguel Cardona said in a statement.
The Department of Education has helped cancel $146 billion in student debt for 4 million people through executive actions, the White House added.
Biden, 81, traveled to Madison, Wis., to deliver a re-election speech about his administration’s efforts at “lowering costs for Americans”, while Harris, 59, will visit Philadelphia and second gentleman Doug Emhoff traveled to Phoenix.
Cardona also traveled to New York City for an event with student borrowers who have benefitted from the Biden administration’s debt relief programs, including the income-driven repayment plan and the Saving on a Valuable Education (SAVE) plan.
Senate Health, Education, Labor and Pensions Committee ranking member Bill Cassidy (R-La.) slammed the White House student loan relief as an election-year “ploy.”
“These loan schemes do not forgive debt. They transfer the debt from those who willingly took it on to the 87[%] of Americans who decided to not go to college or already worked to pay off their loans,” Cassidy said in a statement.
“This is an unfair ploy to buy votes before an election and does absolutely nothing to address the high cost of education that puts young people right back into debt.”
Cassidy has harshly criticized the Biden administration for its revamped student debt cancellation plan, citing a Penn Wharton Budget Model report last year that estimated the cost to taxpayers could be as much as $559 billion over the next decade — nearly four times the top-line White House figure.
“Here we go again,” House Education and Workforce Committee chairwoman Virginia Foxx (R-NC) said in a statement. “President Biden continues to break the law in his quest to make college ‘free.’ The problem is these so-called solutions to the student loan system outlined in the President’s plans forces taxpayers—many of whom never stepped foot on a college campus— to pay for loans others willingly took out and benefited from. Mr. President, this is not monopoly money. Students, families, and taxpayers deserve real solutions to lower the cost of college and fix the federal student loan program.”
Under the administration’s income-driven repayment program, a majority of student borrowers with bachelor’s degrees will not have to pay back the principal on their loans, a report from the Urban Institute showed last year.
Cassidy also pointed out that the focus on student debt cancellation has papered over the “botched” rollout of the latest Free Application for Federal Student Aid (FAFSA), which has made it difficult for 18 million applicants to find “crucial financial information” for colleges in a timely manner.
“The Department of Education’s implementation of FAFSA is in shambles after repeated blunders by the administration,” Cassidy added.
“It seems the reason students don’t know what schools they can afford this year is because Biden’s Department of Education is spending its time concocting student loan schemes instead of fixing the mistakes they’ve already made on FAFSA.”
At least $39 billion were forgiven through income-driven repayment plans, $9 billion through a plan for public service workers and those with disabilities and $5 billion through existing federal loan programs.
Some of those plans have already met legal challenges from Republican-led states. The new cancellation push will likely meet similar opposition and take months to finalize, postponing much of the proposed relief until later this year.
The Supreme Court in June 2023 struck down the Biden administration’s attempt to forgive $430 billion in student loans for 43 million borrowers under a 2003 law meant to provide financial relief to veterans of the Iraq and Afghanistan wars.
That plan would have provided up to $20,000 in relief per student borrower, who were entitled to the debt cancellation due to the economic strain caused by the national emergency of the COVID-19 pandemic, the administration argued.
Since then, the Education Department has introduced proposals to waive student debt through another law, the Higher Education Act of 1965, and to make good on Biden’s 2020 campaign promise to cancel the federally held loans.
The new proposal would allow students with loan amounts higher than what they borrowed to have up to $20,000 of their interest forgiven, and individuals making less than $120,000 and families making less than $240,000 would have almost all of their interest waived.
It also would unilaterally cancel student debt for 2 million borrowers who have not yet applied for loan relief, undergraduates who have been repaying their loans for more than 20 years and graduate students who started repayments 25 years ago.
A shocking Wall Street Journal poll last week found the president trailing former President Donald Trump in Arizona and Pennsylvania as well as Michigan, Georgia, North Carolina and Nevada.
Biden and Trump were tied in a head-to-head matchup in Wisconsin, the survey also found.
