President Joe Biden appears to be increasingly open to taking executive action on federal student debt forgiveness as the midterm elections loom
House Minority Leader Kevin McCarthy on Friday dismissed President Joe Biden’s reported plan to forgive $10,000 in federal student loans per borrower as a political ‘stunt.’
‘To distract from his flailing agenda, President Biden is looking to have working Americans pay thousands toward the college degrees of high-income earners,’ McCarthy exclusively told DailyMail.com.
‘This latest stunt will cost taxpayers hundreds of billions, force Americans who did not go to college to subsidize the degrees of the elite, drive up higher education costs for future generations, and exacerbate inflation even more.’
He concluded, ‘The Biden administration isn’t interested in solving problems – they just want to placate to their progressive base while they leave working Americans paying the tab.’
It was reported Friday that Biden could take executive action to wipe at least $10,000 in federal student debt per borrower, it was reported on Friday.
It would make good on a promise Biden made on the 2020 campaign trail, as he looks to help Democrats get voters to the polls in November’s midterm elections.
A recent analysis by the Brookings Institute put the total cost of forgiving $10,000 for every one of the roughly 43 million student loan borrowers at about $373 billion.
But sources told Bloomberg that any aid is likely to be more targeted to lower and middle-income earners.
Administration officials, however, left the door open to a ‘possibly larger’ amount than $10,000.
‘Lots of options on the table,’ people familiar told The Hill.
The added that the White House was ‘doing a lot of listening right now.’
Biden rejected the idea of forgiving $50,000 per federal student loan borrower when asked about debt cancellation on Thursday.
Demonstrators gather at the Department of Education headquarters in Washington, D.C. on April 4, 2022 to call for President Biden to cancel all student loan debt
Progressives have been calling on Biden to take action on federal student debt for more than a year
DailyMail.com has reached out to the White House for comment.
If action were taken to cancel the full $373 billion student debt — out of some $1.6 trillion total held by American borrowers — that would be nearly the same amount the US spent on helping poor families via the Temporary Assistance for Needy Families program in the two decades between 2000 and 2019.
It would also be more federal dollars than the government has spent on 20 years of public school breakfast and lunch in low-income areas, according to Brookings.
In comments to DailyMail.com, McCarthy dismissed Biden’s reported plan as a political ‘stunt’
The $373 billion sum is also more than double what the country has spent over two decades on providing energy assistance to Americans who struggle to pay for heating in the winter.
On Thursday, the president ruled out the possibility of canceling as much as $50,000 in federal student debt per borrower, as some Democrats in Congress have pushed for.
However he publicly confirmed that at least some debt forgiveness was being considered.
‘I am considering dealing with some debt reduction,’ the president said during a press conference on aid dollars to Ukraine.
‘I am not considering $50,000 debt reduction, but I’m in the process of taking a hard look at whether or not there are going to — there will be additional debt forgiveness.’
He added, ‘I’ll have an answer on that in the next couple of weeks.’
Progressive groups and left-wing lawmakers have been pressing Biden to take executive action to ease the burden of student debt plaguing more than 40 million Americans.
The president has already granted multiple extensions to the existing pause on federal student loan repayment — initiated by former President Donald Trump over the COVID-19 pandemic — with the most recent moratorium expiring on August 31.
But progressives in Congress like Rep. Alexandria Ocasio-Cortez have said that the pause merely delays the uncertainty felt by millions of borrowers.
Late last month, nearly 100 lawmakers led by Senate Majority Leader Chuck Schumer and Senator Elizabeth Warren signed onto a letter urging Biden to forgive as much as $50,000 per borrower.
Canceling even $10,000 per borrower in student debt would be nearly as much as the federal government has spent on welfare over 20 years
That would still have totaled roughly $1 trillion, according to the Brookings analysis.
It’s more than the U.S. government has spent on supplemental social security income and housing assistance programs respectively across a 20-year period.
But not all Democrats are in agreement on how to proceed.
House Speaker Nancy Pelosi said in July that ‘the president can’t do it.’
Conservative Democrat Senator Joe Manchin told reporters earlier this week that action was needed on ballooning student loan debt but was hesitant about ‘just writing it off completely.’
Republicans, meanwhile, have hammered Biden over the idea. GOP lawmakers claim that canceling student debt would disproportionately benefit high-earners and unfairly punish American taxpayers.
Senator Tom Cotton (R-Ark.) claimed it would result in $13,000 of new debt for ‘every family in America.’
‘Why should those who didn’t go to college or responsibly paid their loans be responsible for $13,000 in new debt?’ Cotton wrote on Twitter.
Moderate Republican Senator Mitt Romney (R-Utah), who has voted with Democrats to pass Biden’s agenda before, slammed the debt forgiveness as ‘desperate.’
‘Desperate polls call for desperate measures: Dems consider forgiving trillions in student loans. Other bribe suggestions: Forgive auto loans? Forgive credit card debt? Forgive mortgages? And put a wealth tax on the super-rich to pay for it all. What could possibly go wrong?’ Romney questioned.
And a group of Republican senators are introducing a bill that would ban the president from mass student loan forgiveness.
They’re being led by Senate Minority Whip John Thune (R-S.D.). The bill is also aiming to limit student loan moratoriums after Biden recently extended the relief measure again until August 31.
‘Taxpayers and working families should not be responsible for continuing to bear the costs associated with this suspension of repayment,’ Thune told Fox in a statement.
Meanwhile McCarthy on Wednesday night rolled out a list of ‘winners’ and ‘losers’ after it was reported the president was open to forgiving part of the $1.6 trillion in student loans held by some 43 million Americans.
The House Republican Leader rolled out a list of ‘winners’ and ‘losers’ in a scenario where President Biden cancels some or all of the $1.6 trillion in federal student loan debt
‘FACT → Debt cannot be “forgiven.” It can only be transferred. Someone always has to pay,’ McCarthy wrote on Twitter.
‘As Socialist Democrats plot a transfer of student loan debt, here is who wins and who loses:’
The two ‘winners’ in the scenario, which does not yet have any sort of price tag, are ‘High earners, like doctors and lawyers, who hold 39% of America’s student loan debt’ and ‘Colleges and Universities, who can hike prices since the government is paying.’
McCarthy’s ‘losers’ list is nearly triple in length, including ‘taxpayers, who would be on the hook for paying the loans’ and ‘students and parents who already paid off their loans’ or refinanced them.
He claimed it would also burden ‘future students’ with higher tuition costs as well as anyone with other forms of debt ‘as their payments pile up.’
‘Every single American’ also loses, the GOP Leader said, ‘as this does nothing to solve our debt crisis and will drive inflation even higher.’
Inflation reached a decades-record high in March, rising 8.5 percent over the year prior.