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Floor Speech
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Mr. THUNE. Mr. President, across the street, this morning, oral arguments are occurring at the Supreme Court in two challenges to the President's reckless student loan giveaway.
There are two main parts to the President's scheme. There is the outright forgiveness of $10,000 in Federal student debt and $20,000 for Pell grant recipients, which is set to cost American taxpayers somewhere in the neighborhood of half a trillion dollars. Then there is the President's radical revamp of the income-driven repayment system, which would bring the total cost of the President's plan to somewhere close to a trillion dollars.
The President's new income-driven repayment plan has probably garnered less attention than his plans for student loan forgiveness, but his new income-driven repayment program is just as problematic because it sets up a system in which the majority of Federal borrowers will never--never--fully repay their loans.
One scholar at the Brookings Institution, a left-of-center think tank, estimates that ``the vast majority'' of college students will be eligible for the program and that current and future borrowers enrolled in the program ``[o]n average . . . might only expect to repay approximately $0.50 for each dollar they borrow''--``repay approximately $0.50 for each dollar they borrow.''
The Urban Institute, another left-of-center think tank, estimates that just 22 percent of those with bachelor's degrees enrolled in the President's new income-driven repayment program would repay their loans in full. By contrast, the institute notes that under today's IDR program, we would expect 59 percent of individuals with bachelor's degrees to repay their loans in full.
The nonpartisan Penn Wharton Budget Model estimates the cost of the President's new income-driven repayment program at $333 billion to $361 billion--the range--over 10 years. However, Penn Wharton notes, ``These estimates do not yet include the effects of students increasing their borrowing.''
``These estimates do not yet include the effects of students increasing their borrowing.''
Needless to say, students are likely to increase their borrowing. It is common sense. In fact, the Brookings Institution notes that borrowing is likely to become the preferred means of paying for college under the President's plan. And, of course, as student borrowing increases, so does the cost to taxpayers because it is taxpayers who will be footing the bill for all that student loan money that is never paid back.
Now, both President Biden's outright student loan forgiveness and his student loan forgiveness masquerading as income-driven repayment are going to cost the taxpayers a lot of money. There are the direct costs of the plan that will be paid for by the Federal Government--in other words, by taxpayers, including those who never went to college and those who have already paid off their student loans.
There are the indirect costs, like the fact that the President's student loan giveaway is likely to prolong our current inflation crisis. The Committee for a Responsible Federal Budget, where President Biden's own Treasury Secretary once served on the board, has estimated that the President's plan would ``meaningfully boost inflation''-- ``meaningfully boost inflation.'' Now, you would think that the President might have learned his lesson after helping to set off the worst inflation crisis in 40 years with his massive American Rescue Plan spending spree but apparently not.
It is important to remember that taxpayers are going to be footing the bill for student loan cancellation for Americans who, if they graduated from college, enjoy greater long-term earning potential than many of the Americans who will be helping to shoulder the burden for their debts. This isn't a government handout for the needy; this is a government handout that will disproportionally benefit Americans who are better off.
Of course, the President's student loan giveaway will do nothing-- nothing--to address the root of the problem, and that is soaring college costs. In fact, it is likely to make things worse. Faced with the knowledge that many of their students will never have to fully pay off their loans, colleges will have zero incentive to cut costs, and students are likely to feel less pressure to choose a more affordable college option since there is a good chance they will only have to pay back part of their student loan debt and might even have it forgiven entirely.
It is not hard to imagine a future Democrat President deciding that it is politically expedient to imitate President Biden and just cancel a huge portion of student loan debt outright, especially since college costs and college debt will continue to soar under the President's plan.
Whether President Biden has the legal authority to implement the debt cancellation he proposed is really questionable. He used a law called the HEROES Act, drafted to give the President authority to provide student loan relief in times of war or national emergency and specifically to provide relief to the large number of soldiers deployed to the Middle East in the wake of September 11. It was not intended to provide for widespread student loan forgiveness in a time of peace and low unemployment.
The President himself raised questions about his authority to forgive student loans in a 2021 townhall meeting. The former Democrat Speaker of the House stated plainly--plainly--that the President didn't have this authority. Between bullying from the far left and the prospect of gaining votes in the 2022 election, the President went ahead anyway. And now--now--taxpayers will be saddled with close to an additional trillion dollars in debt on top of the other reckless spending by the Biden administration and the Democrat Congress.
It is not just Republicans who have raised serious concerns about the President's student loan plans. So has the Washington Post and at least one scholar at the left-of-center Brookings Institution and the nonpartisan Committee for a Responsible Federal Budget, where, as I said earlier, the President's own Treasury Secretary once served. And the list goes on.
The President's student loan giveaway is yet another disastrous economic plan coming from the Biden administration, and if it goes into effect, it will be the American taxpayers who once again will be paying the price.
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