Politics
Republicans push back as Biden plans to delay student loan repayment
“There’s no free lunch. Permanent “moratoriums” put taxpayers on the hook for trillions while letting college grads — even rich ones — avoid paying their debts"
April 5, 2022 3:44pm
Updated: April 5, 2022 8:19pm
The Biden administration plans to extend the pause on federal student-loan payments through Aug. 31, marking the fourth extension since the moratorium took effect in March of last year.
Although the freeze on payments and interest accrual has been in place since the start of the coronavirus pandemic, it was set to expire on May 1 – following a 90-day extension due to the surge in the omicron variant of COVID-19.
Student debt has been a pressing issue for voters on both sides of the isle and currently 40 million people owe around $1.6 trillion in federal student debt – a number which exceeds both credit-card and auto debt figures. While the moratorium on payments and interest has lasted longer than most economic relief measures introduced in the early days of the pandemic, many voters have called on Democrats to extend the pause or even cancel the debt all together, the Wall Street Journal reported.
Republican lawmakers, however, have been quick to blast any talk of debt cancellation as “reckless” and accuse the Biden administration of appeasing far-left progressives within the Democratic party, Forbes reported.
According to Republican Sen. Tom Cotton, a fourth extension of the student loan payment pause would be a policy disaster.
“The Biden administration is considering *extending* the student loan moratorium,” Cotton tweeted. “This is a terrible idea.”
“There’s no free lunch. Permanent “moratoriums” put taxpayers on the hook for trillions while letting college grads — even rich ones — avoid paying their debts.”
Similarly, North Carolina Rep. Virginia Foxx — the top Republican on the Committee on Education and Labor — released a statement in January on "the importance of restarting federal student loan repayments," according to a press release.
Citing the $150 billion taxpayer price tag on Biden’s proposed extension, Fox added that the president is attempting to “satisfy the progressive wing of the Democrat party” – a move which she called “political theater” and “unacceptable.”
"The Biden administration owes Congress and the American people a plan that will address challenges facing student loan servicing companies and borrower confusion and provide a clear timeline for when student loan payments will resume," Foxx said.
"President Biden's latest extension is a troubling trend toward blanket student loan forgiveness, which would be a massive mistake, with major consequences for borrowers and taxpayers," she added.
Republican Sen. Marco Rubio, for his part, has offered the Biden administration an economically viable policy alternative: the elimination of student loan interest.
The Florida senator reintroduced his Leveraging Opportunities for Americans Now (LOAN) Act in August of last year. In essence, the legislation would reform the federal direct student loan system by eliminating interest and replacing it with a one-time, non-compounding origination fee “that borrowers will pay over the life of the loan.”
“Working-class Americans should be able to pursue an education without having to worry about finding themselves trapped in an insurmountable debt cycle for years beyond graduation,” Rubio said.
“My bill would reform our federal student loan system so that borrowers don’t get stuck with debt they can never repay. Instead of accruing interest, borrowers will pay a one-time fee paid out over the life of the loan and will be automatically placed in an income-based repayment plan. It’s time to update our federal student loan system, because fear of debt should never stand in the way of an education and the pursuit of a better life.”
