House Republicans are protecting hard working Americans with H.J. Res. 45, which uses the Congressional Review Act to overturn the Biden Administration’s student loan scam. Last year, Biden’s Department of Education issued a rule to cancel some federal student loan debt, which would cost American taxpayers hundreds of billions of dollars. Biden’s student loan scam would place a burden on the 100 million Americans who never went to college, while transferring wealth to those who willingly took on, and have yet to pay off, their debt.
Thanks to the new Congressional Budget Office (CBO) estimate for the House-passed Limit, Save, Grow Act, we now know that the price tag for the debt cancellation and the related Income-Driven Repayment (IDR) regulatory proposal will total $570.5 billion. This amounts to a cost per taxpayer of $3,526.
Outstanding federal student loan debt currently totals $1.7 trillion and is disproportionately held by the wealthy.
Of an estimated 255 million adult Americans, 43 million have student loan debt. Student loan forgiveness demands that those 210 million Americans take on the debt of those 45 million borrowers.
In a 2014 analysis, researchers found that, since 1992, the median borrower has consistently spent only about 4 percent of monthly income repaying student loans. In a 2019 analysis of millennial households, the 4 percent rate still held.
Programs already exist to aid students in re-paying their loans through IDR plans. As of 2019, 40 percent of borrowers are enrolled in an IDR plan.
If blanket loan forgiveness is enacted, students would, understandably, expect their loans to be forgiven in the future, and that expectation could lead to increases in borrowing, throwing gasoline on the bonfire of college tuition.
Student loan forgiveness would create an incentive for students to accumulate more debt and award as much as $192 billion to the top 20 percent of income earners.
Estimates indicate that it would take just three years for the outstanding student loan balance to return to its current level if we were to cancel $10,000 per borrower. That’s without taking into account increased rates of borrowing caused by moral hazard or the subsequently higher tuition costs.