Just after news broke of Biden’s plan to cancel some student debt, Republicans introduced a bill that would explicitly bar him from doing so and limit his ability to extend a student debt payment pause.
Meanwhile, the student loan payment pause, which was originally put into effect by Donald Trump during the onset of the pandemic,The Republicans argue that student loan cancellation and the payment freeze are a “handout” to wealthy college graduates and those who may have taken on loans for them, parroting a right-wing argument that the people who would benefit most from loan forgiveness are already wealthy and don’t need the money.
These arguments are based on false premises, however. People who take on student loans typically come from families without generational wealth that could cover the cost of tuition in the first place, and researchstudent loan forgiveness is progressive, meaning that it would provide the biggest benefits to the least wealthy debtors. The higher the loan amount that is canceled, the more progressive the benefit, the Roosevelt Institute found last year.
The report also found that cancellation would be crucial to closing the racial wealth gap, providing aid to Black and Latinx borrowers who suffer the most from student loan debt. In their press release on the bill, the senators also say that the payment pause costs taxpayers $5 billion a month, citing Education Departmentthat shows $5 billion a month as the amount that borrowers save as a result of the pause extension. However, that’s an oversimplification of how federal student loans work and a flattening of the reason that the government gives student loans to begin with.
It also suggests that student loans should be a method of raising money for the government, a notion that even Trump has said is needlessly cruel. “That’s probably one of the only things the government shouldn’t make money off — I think it’s terrible that one of the only profit centers we have is student loans,” Trump
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