Five US senators, including Richard Burr and Thom Tillis of North Carolina, proposed a bill in late May that would prevent President Biden from writing off student loan debt. The Student Loan Accountability Act will not restrict pre-existing federal student loan forgiveness programs, such as Teacher Loan Forgiveness and Civil Service Loan Forgiveness.
The bill comes as the Biden administration announced this week that it would forgive $5.8 billion in student loan debt for 56,000 students who attended the now-defunct for-profit Corinthian colleges. In 2015, Corinthian collapsed after investigations into “deceptive advertising and recruitment practices”. Students who have already repaid their loan will not be eligible for assistance.
About 42.9 million Americans have student loan debt. That’s about 12.9% of the U.S. population, according to 2020 census data. Total student debt outstanding is about $1.59 trillion, or about $37,000 per debtor.
Wording in the bill says canceling student debt will lead to higher inflation rates and contribute up to $1.7 trillion to the growing national debt. The senators also believe that the cancellation of student loans would encourage academic institutions to raise tuition fees.
“Working Americans are struggling to afford essentials like gas and groceries under the worst inflation in 40 years, but that won’t stop the Biden administration from pushing more inflationary policies that primarily benefit the poor. highest earners,” Burr said in the statement.
Sponsors say canceling all student loans would mainly benefit the richest 20%, who own a third of total student loan debt, while the poorest 20% only owe 8% of the debt. debt. The senators believe that canceling student loans could increase inflation between 4% and 20%, and they urge people to be aware of those numbers during a time of historic inflation.
A poll conducted by the Harvard Kennedy School in April indicates that only 38% of people favor the complete cancellation of student debt. Cancellation support has risen by five percentage points since 2020, while government support helping with student loan repayments has fallen by eight points.
The main arguments in favor of canceling student loans from the Center for Law and Social Policy are that it would promote gender and racial equity, since women hold more than two-thirds of all student debt and black people have average higher levels of student debt. Debt forgiveness proponents also believe that student loans prevent people from reaching major life milestones, such as starting a family or buying a home. CLASP says canceling student debt would have a boosting effect on the economy, boosting GDP by billions of dollars and creating up to 1.5 million new jobs in the labor market.
“Cancellation of student debt is a targeted and progressive policy that would benefit those who struggle the most,” CLASP says on its website. “While wealthier borrowers make larger monthly payments, student debt as a share of income is higher for low-income borrowers.
“It looks like a loser’s question for the party trying to win back the working class,” Bill Maher said on Real time with Bill Maher May 6. “13% of people have university debt, that’s not a lot of people. 65% do not go to university at all.
“What I would much rather see Democrats do is get back to their roots. Win it. We’re the party that created the GI Bill,” Paul Begala, Bill Clinton’s former chief strategist in 1992, told Real Time with Bill Maher, “The guys who got the GI Bill earned it. Give two years of service and you will have earned it [college education].”
Without a majority in both houses of Congress, a bill to block part of the Democratic president’s agenda is unlikely to make its way through the Democratic House and Senate and into that president’s desk. .