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| Photo Credit: AP. |
Close to two dozen Republican governors oppose President Joe Biden’s student loan forgiveness scheme.
On Monday the mostly GOP governors sent a letter to Biden objecting to his student load cancellation program, describing the program as a dubious way to shift the debt borders off wealthier professionals and onto poorer working families, The Washington Times reported.
Iowa Gov.
Kim Reynolds and others said Mr. Biden’s move will fuel inflation and
accelerate borrowing with his push to cancel $10,000 in student debt for
borrowers who earn less than $125,000 per year and $20,000 in debt for those
who received Pell Grants, according to The Washington Times.
Where does the power to forgive debt lies?
They argued
that the power to forgive debt rests with Congress and not with the president,
noting that the plan was unfair.
“Borrowers with the most debt, such as $50,000
or more, almost exclusively have graduate degrees, meaning hourly workers will
pay off the master’s and doctorate degrees of high salaried lawyers, doctors,
and professors,” the letter read, according to The Washington Times. “Simply
put, your plan rewards the rich and punishes the poor.”
Who qualifies for student load forgiveness?
Under the
proposals, borrowers who earn less than $125,000 a year, or families earning
less than $250,000 would be eligible for the $10,000 loan forgiveness. Recipients of Pell Grants, which are reserved
for undergraduates with the most significant financial need, can get up to
$10,000 in additional cancellations by the federal government.
The
president is extending a pause on federal student loan payments for the “final
time” through the end of 2022, according to The Associated Press.
How many Americans have federal student debt?
More than 43
million people have federal student debt with an average balance of $37,667,
The Associated Press quoted federal data. Nearly a third of borrowers owe less
than $10,000, and about half owe less than $20,000. .The plan according to The
White House would erase the federal student debt of about 20 million people.
Current
students would only get a relief if their loans were originated before July 1,
2022 just as the president proposes a cap on the amount that borrowers must pay
monthly on undergraduate loans at 5% of their earnings, down from the initial
10%, according to The Associated Press.
“A high-cost
degree is not the key to unlocking the American Dream — hard work and personal
responsibility is,” the governors wrote, The Washington Times reported. “For
many borrowers, they worked hard, made sacrifices, and paid off their debt. For
many others, they chose hard work and a paycheck rather than more school and a
loan. Americans who did not choose to take out student loans themselves should
certainly not be forced to pay for the student loans of others.”