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U.S. Sen. John Thune (R-S.D.) today discussed his new bill that would end President Biden’s unnecessary federal student loan deferment extensions. Thune also noted that canceling student debt would be grossly unfair to the Americans who worked hard for years to pay off their loans, in addition to its likely effect of making an already bad inflation situation even worse.

 

Thune’s remarks below (as prepared for delivery):

 

“Mr. President, the Biden administration can’t quite seem to decide on the status of the pandemic … or the status of the economy.

 

“On the one hand, we’re being told that we no longer need pandemic-era border restrictions intended to help limit illegal immigration and prevent the spread of COVID.  

 

“On the other hand, the administration is still fighting to require Americans to wear masks on public transit and airplanes and is urging Congress to pass additional COVID spending to fight the pandemic the administration seems to believe is over at the border. 

 

“It’s a confusing message, to say the least.

 

“Americans know the pandemic can’t simultaneously be over for migrants at the border but make it too dangerous for a South Dakotan to fly from Sioux Falls to Minneapolis without a mask.

 

“And the administration’s messaging is similarly muddled on the economy and student loans.

 

“On the one hand the president is proudly touting “record” job creation and economic growth – even though most of what he’s taking credit for is the natural consequence of economic recovery from the pandemic.

 

“On the other hand, the president recently announced that he is extending the moratorium on federal student loan payments, interest, and collections for another four months, until August 31, because Americans are still suffering economically as a result of the pandemic.

 

“Which is it?

 

“Is our economy thriving?

 

“Or are Americans economically distressed?

 

“Mr. President, the student loan repayment moratorium and interest freeze included in the CARES Act at the beginning of the pandemic made sense.

 

“Our economy was starting to shut down, and Americans’ jobs were in jeopardy.    

 

“But it made sense as a temporary measure for a genuine emergency.

 

“We no longer have double-digit unemployment, as we did during some of the worst moments of the pandemic.

 

“Our current unemployment rate is a low 3.6 percent.

 

“For college graduates, the unemployment rate is a staggeringly low 2 percent.

 

“To paraphrase the Wall Street Journal’s editorial board on this subject, if student loan borrowers aren’t ready to return to making payments now, they’ll never be.

 

“Even the Washington Post editorialized against the president’s latest extension, noting, and I quote:

 

“‘What was a needed emergency measure at the start of the pandemic is no longer justified.  It is hard to make an argument that college graduates are struggling right now.  The unemployment rate for Americans with a bachelor’s degree or higher is a mere 2 percent.  There is a near-record number of job openings.’

 

“Mr. President, it is true that Americans are facing economic challenges as a result of the inflation President Biden and Democrats helped create with their ill-considered American Rescue Plan Act.

 

“But if anything President Biden’s latest student loan pause could help prolong our inflation problems.

 

“And, importantly, it will have the biggest benefits for those who are most able to deal with price hikes from inflation.  

 

“This clearly regressive policy benefits high-debt, high-income borrowers significantly more than low-debt, low-income borrowers. 

 

“To quote the Washington Post once more, ‘Rising prices of gas, rent, food and cars are a hardship, but forgiving interest on student loans for four more months offers the biggest benefits to people who have earned degrees in medicine and law.  These people go on to have lucrative careers.  Meanwhile, the 64 percent of Americans who do not have a college degree don’t benefit at all from Biden’s pause on loan repayments.’

 

“And subsidizing all those doctors and lawyers is expensive.

 

“The student loan repayment moratorium has already cost the federal government more than $100 billion, and by the time the president’s latest extension of the moratorium is up, it will have cost the federal government billions more.

 

“After a huge increase in our national debt thanks to the pandemic and reckless Democrat spending, the government does not need to be forgoing billions of dollars by providing student loan relief to Americans with some of the highest earning potential.

 

“Which is why this morning I introduced legislation – the Stop Reckless Student Loan Actions Act – to end the current deferment on student loan repayments and limit a president’s authority to pause student loan repayments in the future.

 

“My legislation, which I introduced with my colleague Senator Richard Burr and Senators Braun, Cassidy, and Marshall, would continue to allow a president to temporarily suspend student loan payments during a future national emergency, but it would limit those suspensions to a period of 90 days and subject them to congressional disapproval. 

 

“It would also ensure that relief is targeted to those who need it most by preventing presidents from suspending payments for higher-income individuals.

 

“And, importantly, it would prevent a president or secretary of education from using a national emergency to cancel student loan debt.

 

“Which leads me to perhaps my biggest concern in all of this.

 

“Deferring student loan payments is a bad policy that is costing the federal government money it doesn’t have.

 

“But it pales in comparison to the ultimate goal for many Democrats – canceling student loan debt entirely.

 

“Days ago, the president’s press secretary, referring to the payment deferment, said, and I quote, ‘Between now and August 31, it’s either going to be extended again or we’re going to make a decision … about canceling student debt.’

 

“Her statement made it alarmingly clear that the president isn’t just temporarily deferring loan payments but is seriously considering canceling a significant portion of federal student loan debt. 

 

“And she doubled down on that idea on Monday, noting that, quote, ‘What I would tell you is that not a single person in this country has paid a dime on federal student loans since the president took office.’

 

“Canceling student loan debt, Mr. President, is a bad idea for so many reasons.

 

“In the first place, it’s money the federal government simply doesn’t have.

 

“Democrats often speak as if the federal government were able to draw from an unlimited pot of money.

 

“But of course that’s not true.

 

“Government funds aren’t anywhere close to being unlimited.

 

“And government coffers aren’t filled from a pot of gold at the end of the rainbow.

 

“They’re filled by taxpayer dollars.

 

“And sooner or later, it will be taxpayers who foot the bill for any loan forgiveness program – including the many taxpayers who opted not to attend college or chose a debt-free way of doing so.

 

“I can scarcely think of anything more unfair than forcing Americans who incurred no college debt to shoulder the bill for those who did – especially when a substantial portion of that debt is incurred by those with the greatest earning potential.

 

“Canceling student debt would also be grossly unfair to the Americans who worked hard for years to pay off their loans.

 

“An American who had just finished paying off his or her higher education debt would get nothing from such a cancellation, while a recent graduate who had made just a month or two of payments could see his or her debt disappear entirely.

 

“And canceling student debt would do nothing to address the real problem, which is the out-of-control cost of higher education.

 

“In fact, it would likely make the problem worse.

 

“Not to mention the fact that student loan cancellation would take an already bad inflation situation and almost undoubtedly make it much worse.

 

“We think 8.5 percent inflation is bad – and it is.

 

“But canceling student loan debt this fall could take inflation to new and even more painful heights.

 

“Mr. President, I strongly support finding ways to drive down the cost of higher education and educate students about the dangers of excessive debt.

 

“I also support measures to help students pay off their student loans without putting taxpayers on the hook for hundreds of billions of dollars or more – like the measure I got included in the CARES Act and extended later that year to allow employers to make tax-free payments on their employees’ student loans.

 

“But unnecessarily deferring student loan payments – or, worse, canceling a significant portion of student debt entirely – is a terrible idea for many reasons.

 

“I hope colleagues from both sides of the aisle will join the student loan bill I introduced earlier today to end these endless and unnecessary loan deferment extensions.

 

“And I hope at least some of my Democrat colleagues will recognize the unwisdom of canceling student loan debt, its blatant unfairness to individuals who already paid off their student loans or never went to college, and the negative effect it would have on our inflation-ridden economy.