Senator 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:
- prohibit the Biden administration from enacting large scale student loan cancellation to cancel all or part of student loans for borrowers; and
- include exemptions for target federal student loan forgiveness, student loan forgiveness, or student loan repayment programs such as civil service loan forgiveness and teacher loan forgiveness.
“It makes no sense for the Biden administration to write off nearly $2 trillion in student loan debt,” Romney said. “This decision would not only be unfair to those who have already paid off their loans or decided to pursue alternative education paths, but it would be extremely inflationary in an era of already historic inflation. Democrats and Republicans have called on the President not to make this reckless move and pile more on our $30 trillion national debt. And while the president’s legal authority to cancel that debt is questionable at best, our bill would ensure that he would be prevented from acting.
Five Republican senators introduced similar legislation last month that would also prevent Biden from canceling student loans.
Canceling student loans: Why Republicans want to stop canceling student loans
Republicans in Congress have opposed large-scale student loan cancellations for several reasons. The sponsors of this legislation say that if Biden cancels student loans, it will:
- raise inflation to between 4% and 20%, according to the Committee for a Responsible Federal Budget;
- benefit the wealthiest student borrowers, since almost a third of all student debt is owed by the top 20% and only 8% is owed by the bottom 20%, according to the Brookings Institution;
- encouraging colleges and universities to raise tuition fees;
- increasing the national debt;
- disproportionate direct benefits to residents of Washington, D.C., who owe more average student debt than any other region in the United States
“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 poor. highest earners,” Sen. Richard Burr (R-NC), a co-sponsor, said.
Will your student loans be forgiven?
Congress won’t pass this bill, so don’t expect it to become law anytime soon. Why? Republicans do not control the United States House or the United States Senate. That said, while this bill would prevent large-scale student loan cancellation, it would allow the Biden administration to cancel student loans in targeted ways through existing federal student loan cancellation programs. Will Biden cancel your student loans? Perhaps. The president is considering at least $10,000 in student loan forgiveness for millions of borrowers, though it’s unclear who would qualify for student loan forgiveness. Progressive Democrats in Congress still want Biden to forgive up to $50,000 in student loans. They argue that large-scale student loan relief will stimulate the economy, have no impact on inflation, reduce disparities and increase home ownership, among other benefits. Temporary student loan relief is ending soon, so now is an opportune time to prepare for the restart of student loan repayments. Here are popular options to consider: