House, Senate candidates weigh in on president’s plan to cancel student loans
By Guy Page
President Biden’s proposed student loan debt forgiveness would likely increase the cost of federal ‘ObamaCare’ health insurance, the Libertarian nominee for the U.S. House of Representatives warned today.
The president’s plan would provide debt forgiveness of $20,000 for Pell grants and $10,000 for other grants, and would cap undergraduate loan payments at 5% of income.
“While I appreciate the President’s efforts as a holder of student loans, I’m deeply concerned about the inevitable increase in inflation and cost of living. As an accountant and person who understands math, I know that nothing is free,” Libertarian nominee Ericka Redic of Burlington said.
“I’m also concerned about the Americans who will lose their ObamaCare subsidies,” Redic said. “Most Americans don’t know that the Obama Administration nationalized the student loan industry, in order to use the interest income to pay for the insurance subsidies.”
The Hill news site reported in 2013 that “according to the Congressional Budget Office, $8.7 billion of the money collected in student loan interest payments actually goes to pay for ObamaCare……The profits from student loans are divided as follows: $8.7 billion goes to pay for ObamaCare; $10.3 billion goes to pay down the federal debt; and $36 billion goes to Pell Scholarship grants.”
In effect, the federal government charged high interest on the student loans, and then invested the substantial profits into government spending – including Obamacare premiums. With fewer loan repayments, revenue for those three “buckets” will suffer.
Redic called this practice part of the government’s “predatory lending” to students desperate for a college education.
This also doesn’t correct the reality that our Federal government is a predatory lender,” she said. “Why are they giving out loans for degrees that have no hope of earning enough income to actually pay the loans back? We must insist on education reform where we stop forcing young people into debt.”
Becca Balint, the Democratic House nominee, Tweeted yesterday that the president’s plan will help right racist wrongs, but that more action is needed.
“Undergraduate students leave college with an average of $25,000 in student debt. That number doubles for Black graduates. @potus decision is a strong step toward reducing the racial wealth gap and creating a more prosperous future for millions of Americans,” Balint said. “There is still so much to do. Too many Vters will remain burdened by student loan debt. That’s why I will continue to fight for complete cancellation of student debt and work tirelessly as Vermont’s congresswoman to make college and post-high school education affordable for all.”
GOP candidate Liam Madden said: “There are things I like, and things I find troubling regarding President Biden’s actions on student debt relief. What I like: Investing in the education of our young people, and the productive freedom that living with less debt enables, is certainly a worthy goal that stands to pay society back. People putting more of their income into home ownership, and feeling more free to engage in entrepreneurship is certainly an upside.
“On the other hand, how that is achieved is an important consideration. Given the short time since the decision was made, I am not yet certain if Biden’s actions are legally and constitutionally appropriate. My understanding is that the President does have some discrete authority over the Department of Education’s debt forgiveness policy. However, it seems likely to me that Biden’s action goes beyond the authority given to him, and he is in fact superseding congressional action.”
The GOP and Democrat nominees for Senate took dramatically different positions on Biden’s plan.
“The Student Loan Forgiveness executive order announced yesterday is obviously going to make a lot of people happy, but it sets a bad precedent and is more of the overspending that has caused inflation, recession, and a $31 trillion national debt,” GOP nominee Gerald Malloy said. “It is also unfair in many ways to taxpayers and workers and those that paid for their education, does not address the underlying education cost problem, and gives the appearance of ‘buying votes’ while further fueling the collapse of the dollar. Overall this will not improve the economic situation our country is in. This is a perfect example of why we need to elect change.
Like Balint, Democrat Senate nominee and current Rep. Peter Welch Tweeted that Biden’s plan is just a start:
This plan provides much-needed relief for hardworking Americans, so many of whom are overburdened by student debt. I’m glad @POTUS is relieving some of that pressure for Vermont families.There’s more to do to make college affordable for all, but this is a good step forward.