Sen. Mitt Romney wants to stop President Joe Biden from canceling student loans.
Here’s what you need to know — and what it means for your student loan debt.
Romney (R-UT) and four Republican senators introduced the Student Loan Accountability Act, which would:
- prohibit the Biden administration from enacting wide-scale student loan cancellation to forgive all, or some, student loans for borrowers; and
- include exemptions for existing targeted federal student loan forgiveness, student loan cancellation or student loan repayment programs such as public service loan forgiveness and teacher loan forgiveness.
“It makes no sense for the Biden Administration to cancel nearly $2 trillion in student loan debt,” Romney said. “This decision would not only be unfair to those who already repaid their loans or decided to pursue alternative education paths, but it would be wildly inflationary at a time of already historic inflation. Democrats and Republicans alike have called on the President to not take this unwise step and pile more onto our $30 trillion national debt. And while the President’s legal authority in forgiving this debt is dubious at best, our bill would ensure that he would be prevented from taking action.”
Five Republicans senators introduced similar legislation last month that also would prevent Biden from canceling student loans.
Student loan cancellation: why Republicans want to stop canceling student loans
Republicans in Congress have opposed wide-scale student loan cancellation for several reasons. The sponsors of this legislation say that if Biden cancels student loans, it would:
- increase inflation between 4% and 20%, according to the Committee for a Responsible Federal Budget;
- benefit wealthier student loan borrowers, since nearly one-third of all student debt is owed by the wealthiest 20% and only 8% is owed by the bottom 20%, according to the Brookings Institution;
- encourage colleges and universities to increase tuition;
- raise the national debt;
- direct disproportionate benefits to Washington, D.C. residents, who owe more average student loan debt than any other area in the U.S.
“Working Americans are struggling to afford essentials like gas and groceries under the worst inflation in 40 years, but that won’t stop the Biden Administration from pushing more inflationary policies that primarily benefit the highest earner,” Sen. Richard Burr (R-NC), a co-sponsor, said.
Will your student loans get canceled?
Congress won’t pass this proposed legislation, so don’t expect this to become law any time soon. Why? Republicans don’t control the U.S. House or U.S. Senate. That said, while this proposed legislation would prevent wide-scale student loan cancellation, it would permit the Biden administration to cancel student loans on a targeted basis through existing federal student loan forgiveness programs. Will Biden cancel your student loans? Maybe. The president is considering at least $10,000 of student loan cancellation for millions of borrowers, although it’s unclear who would qualify for student loan forgiveness. Progressive Democrats in Congress still want Biden to cancel up to $50,000 of student loans. They argue wide-scale student loan relief will stimulate the economy, not impact inflation, reduce disparties and increase home ownership, among other benefits. Temporary student loan relief is ending soon, so now is a smart time to prepare for the restart of student loan payments. Here are popular options to consider:
- Student loan refinancing (lower interest rate + lower payment)
- Income-driven repayment (lower payment)
- Student loan forgiveness (federal student loans)
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