Republicans are calling President Joe Biden’s student loan relief “outrageous” and an “insult.”
Here’s what you need to know — and what that means for your student loans.
As progressive Democrats and student borrowers applaud Biden’s decision to extend the student loan payment pause for an unprecedented fourth time, not everyone is excited. Yesterday, Biden extended student loan relief through August 31, 2022, which will benefit 41 million student borrowers. However, several Republican members of Congress have called the student loan relief “outrageous” and an “insult” to American workers. (Student loan cancellation and student loan payment suspension are confusing. Here’s what to know).
Pausing student loan payments: Student loan relief is an ‘insult’
“President Biden’s perpetual moratorium on student loan payments is an insult to all Americans who have paid their debts responsibly,” Sen. Tom Cotton (R-AR) tweeted on Tuesday.
For Cotton, paying off a student loan means personal responsibility — and borrowers must repay their debt. Cotton says extending the student loan payment break is a “terrible idea.” If student borrowers fail to meet their financial responsibility, Cotton argued, the government would be forced to pay student loan debt for individual borrowers — which is unfair. (Student loan payment pause: Senator says extending student loan relief is unfair to most Americans.)
Extension of student loan payment break is ‘scandalous’
Rep. Virginia Foxx (R-NC), who is the top Republican on the House Education and Labor Committee, said hard-working Americans “have footed the student loan bill for graduate students and Ivy League lawyers to the tune of $5 billion each month as their wallets are emptied by soaring inflation… The outrageous extension of this moratorium contradicts the administration’s promise to the American public and without other basis than the president’s declining polling numbers.(Biden could extend the student loan payment pause indefinitely.) This isn’t the first time Foxx has criticized Biden’s extension of student loan relief. Foxx said Biden’s third extension of student loan relief was troubling and large-scale student loan forgiveness will ultimately cost the feds more than $200 billion of dollars. (The new proposal would extend the student loan payment break and cancel student loans).
Why Republicans Oppose Large-Scale Student Loan Cancellation
Some Democratic supporters of suspending student loan payments believe large-scale student loan cancellation will come next. That said, Republicans in Congress have strongly opposed canceling student loans for several reasons. Here are some reasons:
- Significant cost to the federal government: For example, canceling a student loan of up to $50,000 for borrowers could cost at least $1 trillion.
- Most Americans do not have student loans: About 45 million, or 20%, of American adults have student loans. That means 80% of Americans don’t have a student loan or haven’t gone to college.
- Benefits high-income earners: Large-scale student loan cancellation would disproportionately benefit high-income earners. Why? About 50% of student loan debt comes from higher education.
- Personal responsibility: Student borrowers must repay the debts they have promised to repay.
- Moral hazard: If student loan cancellation happens now, future student borrowers might borrow more and expect the government to cancel their student loans as well.
(Biden could cancel student loans while ending student loan relief).
Student loans: next steps
Despite Republican opposition, student borrowers will receive greater relief until August 31, 2022. Until Republicans regain the presidency or win a majority of seats in Congress, it will be difficult to adopt a policy alternative to the pause in student loan payments, or a possible large-scale cancellation of student loans.
When browsing through your student loan repayment options, don’t forget to consider your financial goals and how to pay off student loans faster: