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WASHINGTON — U.S. Sen. John Thune (R-S.D.) today spoke on the Senate floor about President Biden’s most recent student loan giveaway scheme, which would forgive student loan balances after 10 years of payments for certain borrowers, including those in high-income households. Thune noted that instead of creating a real plan to lower the costs of higher education, President Biden continues to propose budget-busting student loan bailouts that would force 87 percent of Americans who do not have student loan debt to bear the costs of the 13 percent of Americans who do. Last week, Thune joined his colleagues in introducing a resolution of disapproval to block the president’s plan.
Thune’s remarks below (as prepared for delivery):
“Mr. President, three weeks ago, President Biden officially launched the second part of his student loan giveaway – his dramatic overhaul of the REPAYE program, an income-driven repayment plan for federal student loans.
“The president’s revamp flew under the radar a bit when it was first announced, overshadowed by his plan to ‘forgive’ up to $10,000 of student loan debt outright – $20,000 for Pell Grant recipients.
“But the truth is that the president’s new income-driven repayment plan – which he has dubbed the Saving on a Valuable Education plan, or the SAVE plan – is just as problematic, if not more, as the president’s scheme to forgive student debt outright.
“Because the new SAVE plan will create a system in which the majority of future federal borrowers will never fully repay their student loans.
“The nonpartisan Penn Wharton Budget Model estimates that just 24.6 percent of future borrowers will repay their loans in full.
“In other words, less than a quarter of borrowers.
“The Department of Education estimates that borrowers with only undergraduate debt enrolled in the SAVE program can, on average, expect to pay back just $6,121 for each $10,000 they borrow.
“That amounts to the federal government taking on – on average – almost 40 percent of the cost of these undergraduates’ student loans.
“So, Mr. President, let’s call this what it is: loan forgiveness by another name.
“And you don’t have to take my word for it.
“One scholar from the left-leaning Urban Institute had this to say on NPR the other day, ‘I think it's going to be less obvious that it's a big loan forgiveness program to both borrowers and onlookers as well. But, yeah, it’s a big loan forgiveness program. … So no longer a safety net like it has been in the past for undergraduates – this looks more like a broad-based subsidy for undergraduate degrees through loan forgiveness.’
“‘A broad-based subsidy for undergraduate degrees through loan forgiveness.’
“Or, in the words of one scholar from the American Enterprise Institute, ‘a functional entitlement program’ – whose costs, he adds, ‘will prove difficult to control.’
“Mr. President, I don’t need to tell anyone that the problems here are myriad.
“For starters, someone is going to have to bear the costs of all those unrepaid student loans.
“And that someone is American taxpayers.
“Including taxpayers who worked hard to pay off the full balance on their own student loans, without a handout from the federal government.
“And taxpayers who worked their way through school to avoid a heavy loan burden.
“And parents who scrimped and saved to send their children to college debt-free.
“And individuals who covered the cost of their education by enlisting in the military and risking their lives for their country.
“I could go on.
“I am at a loss to understand why taxpayers as a whole should assume a substantial part of the educational burden for individuals, who, if they graduated from college, have greater long-term earning potential than many of the Americans who will be helping to shoulder the burden for their debts.
“And, of course, this program isn’t just being offered to help with undergraduate debt.
“Graduate students, including those in professional degree programs like medical school and law school, will also be eligible for SAVE.
“And I don’t need to tell anyone that the lifetime earning potential of a doctor or a lawyer is usually pretty good.
“But leaving aside questions of fairness, Mr. President, let’s talk about the costs of this de facto new entitlement program.
“Penn Wharton Budget Model estimates that SAVE will cost roughly half a trillion dollars over the next 10 years.
“We have a national debt of $32 trillion and a federal budget that has increased by 41 percent since 2019.
“Contrary to what President Biden seems to believe, we can’t afford to be constantly expanding government programs.
“We simply don’t have the money to be subsidizing the college – and graduate! – education of a group of people whose earning potential will exceed the earning potential of a lot of the people subsidizing their schooling.
“Mr. President, perhaps the worst thing about the president’s new program is that we will be spending all that money and doing nothing to solve the real problem – the high cost of a college education.
“President Biden’s student loan giveaway provides exactly zero incentive for colleges to contain costs.
“In fact, there’s reason to fear it could actually encourage colleges to raise their prices, or at least make them significantly less reluctant to do so.
“And, of course, the president’s proposal does nothing to discourage students from borrowing substantial amounts of money to finance their education.
“Indeed, there’s a good chance students will increase their borrowing as a result of the president’s plan.
“Mr. President, the president’s ill-conceived student loan giveaway is a tremendous disservice to taxpayers – and a terrible move for our economic health.
“And, as I said, it does nothing to address the real problem – the high cost of higher education.
“That’s why last week I joined Senator Cassidy to introduce a resolution of disapproval to block the president’s plan.
“And I encourage members of both parties to support this resolution.
“Anyone who cares about actually addressing the cost of higher education should oppose a program that not only fails to solve the underlying problems but is likely to make things worse.
“Mr. President, I yield the floor.”