GREENSBORO, N.C. (WGHP) – Two North Carolina senators are trying to make sure President Joe Biden does not forgive student loan debt.
Richard Burr, the retiring Republican senator from North Carolina, issued a statement on Wednesday to announce a coalition of senators who have introduced legislation to prohibit President Joe Biden from forgiving student loan debt. His colleague from North Carolina, Thom Tillis, is one of those supporting this measure.
In case you haven’t heard the latest, President Biden, who had pledged to take action on student loan debt, recently has been considering an executive action to cancel up to $10,000 that former students may owe in government-backed loans. The idea would affect approximately 43 million borrowers.
Lest there be a misunderstanding, there already had been a pause on repayment of those loans because of the pandemic. That pause was extended through August.
But Burr, who is ranking member of the Senate Health, Education, Labor and Pensions Committee – helpfully known by the acronym “HELP” – has introduced the Student Loan Accountability Act, his office announced in a release.
In addition to Tills, senators Mitt Romney (R-Utah), Tim Scott (R-S.C.) and Bill Cassidy (R-La.) joined him in submitting the bill, the release said.
Burr said that canceling the loans would add to the $1.7 trillion federal debt, which would occur because the balance would be due to lenders from the government without the debtors being required to contribute.
He also said that Biden’s plan would require people who didn’t go to college to pay for those who did because taxpayers would be responsible for the balance.
“Taxpayers who did not attend higher education or paid off their student loans responsibly should not be footing the bill for those who didn’t,” Burr said in a statement. “Not only is that patently unfair, it doesn’t solve the root problem. Canceling student loan debt unilaterally will only encourage colleges and universities to further increase tuition and encourage future borrowers to take out even riskier loans.”
Burr’s legislation, the release said, would prohibit the Department of Education, Department of Justice, and the Department of Treasury from taking any action to cancel or forgive the outstanding balances, or portions of balances, of covered loans. There would be exemptions for existing forgiveness programs already covered under the Higher Education Act, which would include those for teachers.
The release cited a Brookings Institution study that suggests that a third of student debt is owed by the top 20% of wage earners and 8% by the bottom 20%. It suggested that a pause on repayment would “add $5 billion each month to the national debt in addition to nearly $100 billion already added in FY2020 and FY2021.”
The Committee for a Responsible Federal Budget reported in February that canceling all $1.6 trillion in student loan debt would increase inflation by 0.1 to 0.5 percentage points in the 12 months after the repayment deadline. That calculated to 4% to 20% increase over the Federal Reserve’s forecast rate because the forgiven debt would translate to household income.
Tillis said the priority should be to “address the root causes of the rising cost of higher education.” A Georgetown University study calculated that between 1980 and 2020, the average price of tuition, fees, room and board for an undergraduate degree increased by 169%.
Student loan debt in North Carolina is significant. In Greensboro, for instance, the median student loan balance is $26,402. The city’s ratio of debt to median income places it in the top 5% nationally. The issue is worse in other cities around the state.