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Thune: Radical Student Loan Forgiveness Plan Wouldn’t Lower Tuition Costs

“With inflation near a 40-year high and the president’s approval rating hitting a new low – and with Democrat prospects for November looking less than rosy – it’s not exactly surprising that the president would look toward student loan forgiveness as a way of distracting voters.”

June 9, 2022

Click here to watch the video.

U.S. Sen. John Thune (R-S.D.) today discussed President Biden’s proposal to forgive student loans and how it would be unfair to Americans who have already paid off their student loans or never incurred student loan debt. He also noted that it would do absolutely nothing to address the underlying problem: the rising cost of higher education.


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


“Mr. President, before I begin, I would like to express my dismay at House Democrats’ decision last night to block legislation to provide enhanced security for Supreme Court justices and their families.


“Due to the unprecedented leak of an early draft of the Supreme Court’s Dobbs decision – and the resultant hysteria from members of the pro-abortion left – the Supreme Court asked Congress for additional authorities to protect justices’ families. 


“This happened four weeks ago. 


“And yesterday’s arrest of an armed man near Justice Kavanaugh’s home – a man who told police that he intended to kill a Supreme Court justice and has been charged with attempted murder – made clear just how needed that protection is.


“Mr. President, the Supreme Court security legislation in question passed the Senate unanimously four weeks ago, but has faced inexplicable delays in the House.


“This should not be a partisan issue.


“The Senate Democrat whip said just yesterday that the House should pass this legislation.


“And I really thought yesterday’s arrest of an individual bent on assassinating a Supreme Court justice would have forced House Democrats to abandon the political games and provide this urgently needed protection.


“There is no excuse for further delay.


“One press report suggests that Democrats may be rethinking their opposition.


“I hope that’s true.


“House Democrats should abandon the political games TODAY and pass this legislation. 


“Mr. President, recent reporting suggests that President Biden may be contemplating forgiving $10,000 in federal student loan debt per borrower.


“This is a bad idea for so many reasons it’s difficult to know where to start.


“But let me begin by pointing out the obvious – that forgiving $10,000 in federal student loan debt would do absolutely nothing to address the underlying problem, and in fact would likely make things worse.


“The price of higher education has risen stratospherically in recent decades.


“The cost of one year of attendance at some colleges – just one year – is more than many Americans’ yearly salaries.


“And that’s a problem.


“But forgiving $10,000 of student loan debt would do absolutely nothing to fix the problem of soaring tuition costs.


“As I said, it would be very likely to make things worse.


“What incentive would colleges have to rein in costs if they could be confident that part of their students’ bill would eventually be picked up by the federal government?


“Because, of course, no one should be deceived into thinking that student loan forgiveness would be a one-time thing.


“One estimate suggests that the student loan burden in this country would return to its current amount within four years of $10,000 in debt being forgiven.


“Four years.


“And calls to forgive more debt would undoubtedly come much sooner.


“Future graduates are very likely to want the same deal that would be offered to graduates today – the wiping away of $10,000 in debt.


“Which brings us to another problem – some students opting to take on unrealistic levels of debt to finance their educations.


“How much greater is that problem going to be if students think that the government is likely to step in and forgive some of the debt they’re agreeing to repay?


“It’s very easy to imagine a student feeling free to take on more debt than he or she otherwise would, believing that the government is likely to eventually reduce the resulting debt burden.


“Mr. President, another massive problem with President Biden’s plan is, of course, its complete unfairness.


“Under President Biden’s plan, an individual who just finished paying his or her student loans after years of work would not receive a penny.


“Meanwhile, a student who graduated a month ago and hasn’t yet paid a dime on his or her loans could see a substantial part of his or her debt wiped away.


“The president’s plan is also incredibly unfair to the tens of millions of Americans without any student loan debt, who would be asked to subsidize the student loan debt of a small percentage of Americans.

“Somewhere around two-thirds of millennials have no student debt – either because they did not attend college or did not take out any loans to attend college.


“The president’s plan is unfair to those who avoided loans by working their way through school or choosing a lower-cost college option.


“It’s unfair to parents who worked for years to ensure that they could finance their kids’ education.


“And it’s unfair to those who chose not to attend a traditional four-year college and instead trained in one of the many essential trades we depend on – from plumbing to air conditioning to broadband installation – at a significantly lower-cost community college or technical school.


“Mr. President, another problem with the president’s plan is what it would teach about 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? 


“Mr. President, another important point to make here is that the average debt for undergraduate education in this country is not as crippling as it might be portrayed.


“Now, there is no question that there are students out there who were encouraged to take on unrealistic levels of debt and are currently struggling with huge debt burdens made up of private as well as federal loans. 


“But the average debt for an undergraduate education is somewhere around $29,000.


“That’s not chump change, but it’s also not an unmanageable level of debt for the average college graduate – especially with the availability of extended repayment plans and income-driven repayment programs.


“Average student loan debt rises substantially for those with advanced degrees, and there are certainly those who take on far too much debt for graduate education, but it’s also important to note that those with advanced degrees have higher – in some cases much higher – earning potential.


“Doctors, for example, take on medical debt north of $190,000 on average, but once they’ve completed their education and training, they can expect to make a robust (sometimes a very robust) six figures per year – making repaying debt of that size a very feasible proposition.


“Mr. President, there is no question that the cost of higher education is out of control – and that students sometimes take on unrealistic levels of debt to pay for it.


“But forgiving student loan debt is not the answer, for the reasons I’ve mentioned, among others.


“Instead, we should be exploring ways to drive down higher education costs.


“We should also be highlighting affordable education options like our nation’s community colleges and technical schools.


“These institutions – like the outstanding tech schools 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 forcing taxpayers to shoulder the burden. 


“In December 2020, 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.


“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 cure-all, but it will certainly help ease the pain of paying back student loans for a number of 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, of course, 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, Republicans are not alone in thinking that forgiving $10,000 in student loan debt is fraught with problems.


“As one Democrat senator said, and I quote, ‘An across-the-board cancellation of college debt does nothing to address the absurd cost of college or fix our broken student loan program.  It offers nothing to Americans who paid off their college debts, or those who chose a lower priced college to go to as a way of avoiding going into debt or taking on debt.  It ignores, really importantly, it ignores the majority of Americans who never went to college, some of whom have debts just as staggering …’


“The New York Times editorial board – not exactly known for toeing the Republican line – noted, and I quote, ‘Canceling this debt, even in the limited amounts that the White House is considering, would set a bad precedent and do nothing to change the fact that future students will graduate with yet more debt — along with the blind hope of another, future amnesty.  Such a move is legally dubious, economically unsound, politically fraught and educationally problematic.’


“Mr. President, with inflation near a 40-year high and the president’s approval rating hitting a new low – and with Democrat prospects for November looking less than rosy – it’s not exactly surprising that the president would look toward student loan forgiveness as a way of distracting voters.


“Or that some Democrats are reportedly pushing for student loan forgiveness as a way to boost their chances in November.


“But I very much hope that the president will decide that temporary political gain is not a good reason to put American taxpayers on the hook for billions of dollars in student loan debt that is not their own.


“As the New York Times noted, the president’s plan is “legally dubious, economically unsound, politically fraught and educationally problematic.”


“And I strongly encourage the president to abandon a plan that even the Democrat speaker of the House has suggested he doesn’t have the authority to implement.


“Mr. President, I yield the floor.”