SIOUX FALLS, S.D. — U.S. Sen. John Thune (R-S.D.) today joined Neil Cavuto on Fox News to discuss President Biden’s executive action to extend the suspension of repayments on qualifying federal student loans and forgive up to $20,000 per borrower. Earlier today, Thune called out Democrats for not having a serious plan to lower the cost of higher education and for putting taxpayers and working families on the hook for billions of dollars of student loans in a blatant political payoff.
On President Biden’s costly student loan decision:
“[President Biden] keeps coming up with new ways to increase inflation in our economy. [Student loan forgiveness] will certainly do that. It’ll increase the cost of college education because tuition costs are going to go up. And I think it will add to inflation because it’s pumping more money out into the economy at a time when we have record 40-year-high inflation.
“Here’s the problem with this, you’ve got 87 percent of the people in this country [who] don’t have student debt, so [the Biden administration is] going to subsidize the 13 percent who do, and the 87 percent who don’t have student loan debt are going to pay for it in the form of maybe higher taxes down the road […] and higher inflation.”
“Democrats are trying to change the subject. They're trying not to talk about inflation and the broken border and energy costs and crime in our streets. They're trying to shift it to something that they think is more favorable ground for them. And the way they do that, in most cases, is they buy it. Democrats spend money, they raise taxes, they grow and expand government. That is what they do. And in this case, at least $300 billion dollars – I mean, think about that – just like that the Democrats dropped $300 billion in hopes again that it has some positive political benefit.
“In the long run this hurts the economy, contributes to inflation, and more importantly, as has already been pointed out by your reporters, this sends a really wrong message to people in this country. This is a country that was built upon a principle of personal individual responsibility. And what you're saying here, to a whole lot of people in the country, is go ahead, take out loans, don't worry about it, we'll just write it off when the time comes.
“And again, that may make a few people happy in the near term, but this is going to have long term consequences that are very, I would say, devastating to the whole principle and ethic that sort of undergirds the American experiment. But in the near term, it's going to have a negative, I think, economic consequence as well because it's going to add to the cost of tuition to go to college in this country.”
Some estimates suggest that forgiving $10,000 in student loans for certain borrowers would cost taxpayers hundreds of billions of dollars. In addition, the current student loan repayment freeze has already cost American taxpayers more than $100 billion. In April, Thune introduced the Stop Reckless Student Loan Actions Act, which would end President Biden’s untargeted, budget-busting suspension of repayments on qualifying federal student loans. The bill would still allow the president to temporarily suspend repayment for low- and middle-income borrowers in future national emergencies and would prohibit the president from cancelling outstanding federal student loan obligations due to a national emergency.
Thune has led common-sense measures to address the problem of student debt. In December 2020, Congress passed a five-year version of legislation Thune introduced with Sen. Mark Warner (D-Va.) to allow employers to help employees repay their loans. Thune and Warner’s Employer Participation in Repayment Act amends the Educational Assistance Program to permit employers to make tax-free payments on their employees’ student loans.