U.S. Sen. John Thune (R-S.D.) today discussed Democrats’ recently introduced resolution calling for President Biden to forgive $50,000 of student loan debt per American. While high college costs and student debt are a problem, Thune does not believe that blanket loan forgiveness is the answer. He proposed alternative solutions such as encouraging affordable education options like community and technical colleges and ensuring that graduates have access to good-paying jobs. Thune introduced legislation that would allow employers to help employees repay their student loans. The Employer Participation in Repayment Act would allow employers to make tax-free payments on their employees’ already-existing student loans.
Thune’s remarks below (as prepared for delivery):
“Mr. President, earlier this month, 16 Democrat senators introduced a resolution calling for President Biden to forgive $50,000 of federal student loan debt per borrower.
“Mr. President, there’s no question that student loan debt is a problem for many Americans.
“College costs have risen to unrealistically high levels, and many students – or their parents – take out unrealistic amounts of debt in response.
“But the answer to this problem is not to have the president – or Congress – simply step in and forgive a large chunk of student loan debt.
“To start with, Democrats’ plan is incredibly, fundamentally unfair.
“Right now, there are individuals around this country who have just paid off the last of their student loans.
“They’ve been working hard and making payments – sometimes for a couple of years, sometimes for a couple of decades.
“What happens to these individuals if the president steps in and forgives $50,000 of student debt?
“I’ll tell you.
“These individuals, who have worked hard for years to pay off their debt, will see no benefit from Democrats’ blanket loan forgiveness.
“Meanwhile, other Americans, who have made no more than a month or two of payments, will see their student loan debt disappear.
“That is incredibly unfair.
“And in addition to being unfair, forgiving student loan debt does absolutely nothing to address the problems that created this debt crisis in the first place.
“In fact, Democrats’ “solution” is likely to make things worse.
“What possible incentive will students have to take a responsible approach to borrowing if they think the federal government will step in and solve their debt problem?
“What incentive will colleges have to restrain tuition growth if they think they can rely on the federal government to subsidize their students’ tuition fees through loan forgiveness?
“Forgiving $50,000 in student loans would also set a terrible precedent on the sanctity of contracts.
“While it may at times be ill-advised, students freely enter into the agreements they make when they take out a loan.
“Should we really be teaching that agreements and contracts mean nothing? That people can incur debt and then not have to pay it off?
“And about that not paying it off, Mr. President.
“The phrase “student loan forgiveness” carries with it a suggestion that these debts will just disappear – that $50,000 can just be wiped off each American’s slate and vanish into the ether.
“But that’s not the case, of course.
“This is money students have borrowed from the federal government, and if the government doesn’t get that money back, the government will be facing an unexpected debt.
“Now, some people – especially some Democrats – tend to talk as if government draws on 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.
“There are a lot of Americans out there who saved up to get a degree or went part-time to avoid incurring debt.
“Are they really supposed to foot the bill for other Americans’ student loans?
“Mr. President, while you might think Democrats’ plan is largely targeted at low-income or disadvantaged individuals, that’s not actually the case.
“Under Democrats’ plan, an American making $20,000 and an American making $120,000 would receive the same loan relief.
“In fact, since more loan dollars are held by those in higher income brackets, higher-income Americans could end up benefiting the most.
“And that brings up another thing we need to remember.
“Yes, a number of Americans carry a significant amount of student loan debt.
“But some of those Americans have incurred that debt for a career that will bring significant financial rewards.
“Plus, a substantial portion of student loan debt is not for undergraduate degrees, but for graduate and professional degrees.
“Under Democrats’ student loan forgiveness proposal, taxpayers could be subsidizing not just bachelor’s degrees but master’s degrees and Ph.D.s, as well as law and medical degrees.
“Mr. President, instead of putting taxpayers on the hook for billions, we should be focused on exploring ways to drive down education costs and educate students on the dangers of taking on excessive debt.
“We should also be highlighting affordable education options like our nation’s community and technical colleges.
“These colleges – like the outstanding institutions we have in South Dakota –provide students with associate’s degrees, certificates, apprenticeships, opportunities to learn a trade, and more.
“There are also things we can do to help students pay off loans without putting taxpayers on the hook for such massive amounts of money.
“In December, Congress passed a five-year version of legislation I introduced with Senator Warner to allow employers to help employees repay their loans.
“Our Employer Participation in Repayment Act amends the Educational Assistance Program to permit employers to make tax-free payments on their employees’ student loans.
“Previously, employers could make tax-free contributions to their employees’ tuition if their employees were currently taking classes, but they couldn’t provide tax-free contributions to help employees with education debts they’d already incurred.
“Our bill allows them to make tax-free contributions to help with employees’ already-existing student loan debt.
“This is a win-win situation.
“It’s a win for employees, who get help paying off their student loans.
“And it’s a win for employers, who have a new option for attracting and retaining talented workers.
“Our bill is not a silver bullet, but it will certainly help ease the pain of paying back student loans for a number of young Americans.
“I’m pleased that it was enacted into law for a five-year period, and I hope Congress will act to make it permanent.
“Another big thing we can do is make sure that graduates have access to good-paying jobs.
“This is key to enabling people to pay off their debt, and we should resolve to build on the economic progress we had made pre-pandemic and focus on policies that will allow our economy to thrive.
“Mr. President, high college costs and student debt are a problem.
“But blanket loan forgiveness is not the answer.
“I hope President Biden will resist Democrat calls to put taxpayers on the hook for billions of dollars in student loans.”