President Biden and Democrats’ reckless spending knows no bounds. In August, President Biden announced his nearly trillion-dollar student loan bailout. His plan has two parts: canceling up to $10,000 in federal student debt ($20,000 for Pell Grant recipients) and revamping the Income-Driven Repayment (IDR) program. These proposals do nothing to address the root cause of soaring college costs, but the price tag threatens to drive up inflation for all Americans and could lead to higher college costs.
The president claims mass debt forgiveness is warranted to make borrowers whole after the pandemic. The reality is that Americans with college degrees have fared well recently, experiencing employment and wage growth, and borrowers with federal student loans haven’t had to pay a nickel in three years. Now the president wants American taxpayers to foot the bill for a misguided bailout that simply transfers student debt from those who voluntarily took on the debt to the backs of taxpayers, including those who didn’t go to college, already paid off student loans, or scrimped and saved to put themselves or their kids through school. On top of that, he envisions transforming the IDR program from a program designed to help borrowers pay back their loans based on their income into another form of loan forgiveness with the average borrower paying back only 50 percent of their total loan.
No one disputes that a college education is valuable and a good investment for many Americans. But it’s an investment and it should be treated as one. While some Americans may choose to invest in a college degree, others may choose to seek another professional credential or learn a trade. These Americans shouldn’t be forced to pay for the decisions of others who choose higher education, take out student loans, and agree to pay those loans back.
Recognizing that college is costly and many young professionals have loans to pay back, there are things we can do to help pay off loans without putting taxpayers on the hook. My bipartisan Employer Participation in Repayment Act became law in 2020 and has been extended through 2025. It allows employers to make tax-free payments toward their employees’ student loans. It’s a win-win: Employees get help paying off their loans and employers have another option to attract and retain talented workers. It’s no silver bullet, but it helps ease the burden of student debt without transferring it to taxpayers.
President Biden’s student loan bailout is costly, unfair, and shortsighted. The president is putting taxpayers on the hook for a nearly trillion-dollar giveaway to college-educated Americans who are often better off than many of the Americans who would shoulder the burden of their debts under the president’s plan. There are actions we can take to ease the burden of college costs without needlessly spending taxpayer dollars. This is another disastrous economic plan from the Biden administration and American taxpayers will pay its true cost.