Willie R. Tubbs, FISM News
This week, Sen. Rick Scott (R-Fla.) headed a team of Republican senators that introduced a bill that would effectively end progressives’ quest for blanket federal student loan forgiveness if passed. However, this bill has competition on the moderate left.
If progressives’ goal of total student debt forgiveness is the far left of the issue, the Debt Cancellation Accountability Act would certainly qualify as the most conservative.
Scott, along with Sens. Cynthia Lummis (Wyo.), Mike Braun (Ind.), and John Barrasso (Wyo.), are pushing for a law that would require the Department of Education to seek an appropriation from Congress in order to forgive the debt of a group of borrowers. A group would be defined as two or more borrowers whose debt is discharged simultaneously and for which the total debt being forgiven is more than $1 million.
“The Biden administration’s latest move to cancel millions of dollars in student loans is yet another example of how far it will go to appease the radical left,” Scott said in a statement. “The reality is, a blanket forgiveness of student loans only benefits a small percentage of the population at the expense of millions of other hardworking Americans. Those who have saved to pay for the education they chose to get, or have no debt at all because they chose a valuable career that doesn’t require a college degree, shouldn’t be on the hook to bail out folks that voluntarily took on debt and now want someone else to pay for it. That’s not how the real world works.”
The move to which Scott refers is an expected $10,000 per borrower forgiveness of federal student loans for any borrower who makes $150,000 or less. President Joe Biden is reportedly still mulling the order, though pressure from within his own party to do even more has not died down. The likes of Sen. Elizabeth Warren (D-Mass.) and Rep. Alexandria Ocasio-Cortez (D-N.Y.) have long called for full loan forgiveness.
Republicans argue that massive student debt forgiveness would only serve to worsen and lengthen the mass inflation currently being endured.
“The Biden administration’s plan to ‘cancel’ millions in student loans will shift the debt of disproportionally higher-earning borrowers onto every American,” Braun said. “This blatant wealth redistribution will only make inflation worse at a time when millions of Americans are already feeling the burden of record-high inflation. I’m glad to join Senator Scott on the Debt Cancellation Accountability Act to prevent the Biden administration from such mass executive overreach.”
With Democrats in control of the House, Senate, and White House, Scott and company’s act is all but guaranteed to fail at least through year’s end. However, were Republicans to retake the House and Senate, there is a sliver of a chance such a bill could find its way into law without the requirement of a Republican in the White House.
As previously reported by FISM, though Biden ran his presidential campaign on promised student debt relief, he has been in no particular hurry to grant it. On numerous occasions, Biden stated he felt the office of the president lacked the authority to grant student loan relief. He could, in an effort to reestablish his claim to being a master negotiator and moderate, back the bill.
However, as Biden prepares to begin a pursuit of a second term, and needs the support of progressives, it is more likely he would veto any Republican-backed bill that makes student debt forgiveness more difficult.
Enter Rhodes Island Democratic Sen. Sheldon Whitehouse. Hardly a household name, Whitehouse has been quietly pushing a bill that would not eliminate student debt but would reduce to zero the interest rates most borrowers face as they repay their debts.
In early June, Whitehouse introduced the Zero-Percent Student Loan Refinancing Act, which would, as the name suggests, allow borrowers to refinance their federal loans so that they pay only the principal they owe. This would be a meaningful change as, according to Bankrate, most student loans have interest rates that vary from 4.99 to 7.54 percent, depending on numerous factors.
“Big student loan interest payments can create a treadmill of debt that many Americans can’t escape,” Whitehouse said in a statement. “Those interest payments often stand between borrowers and the financial freedom to focus on the future, whether it’s buying a home, saving for retirement, or investing in their children. This bill will help people pay off their loans more quickly and get on with their lives.”
In a true indicator of how the federal government operates at present, Whitehouse’s bill has about as much chance of becoming law as Scott’s, even though Whitehouse’s party controls both the legislative and executive branches and Biden is, at best, lukewarm on the idea of forgiveness.
Democrats, particularly in the House, are unlikely to rally to support Whitehouse, as to do so might cost progressives the chance to demand more robust measures.