President Joe Biden has received a letter appealing his executive order on student-loan forgiveness.
Key Details
- Republican governors from 22 states sent a letter to President Biden on Monday, including Florida Governor Ron DeSantis and Texas Governor Greg Abbott.
- Six sitting Republican governors did not sign the letter. No Democrats signed it.
- “As governors, we support making higher education more affordable and accessible for students in our states, but we fundamentally oppose your plan to force American taxpayers to pay off the student loan debt of an elite few—a plan that is estimated to cost the American taxpayer more than $2,000 each or $600 billion total,” the letter says.
- “The letter is unlikely to have any impact on the executive action, with a formal application for forgiveness already being written,” reports Bloomberg.
Why it’s important
As we previously reported, the President announced an executive order last month to offer as much as $20,000 in student loan relief to help reduce the $1.7 trillion in outstanding debt held by American borrowers. Policy analysts have said the effort of the EO will negatively impact the economy and offer negligible improvement for borrowers. The EO is projected to increase inflation according to the Congressional Budget Office.
“The Biden administration estimates that the forgiveness plan will cost $24 billion annually. By contrast, the Republican governors cited a total cost of $600 billion, which is in the middle range for the potential cost estimated by the Penn Wharton Budget Model last month,” says Bloomberg.
It is unlikely that the appeal will change Biden’s decision, but the bipartisan projections coming from both Republican and Democratic analysts show that the criticism isn’t just mudslinging from the president’s political opponents.
Backing up a bit
Critics of the EO have noted that it disproportionately benefits wealthy borrowers at the expense of lower-income borrowers and taxpayers.
“At a time when inflation is sky high due to your unprecedented tax-and-spend agenda, your plan will encourage more student borrowing, incentivize higher tuition rates, and drive-up inflation even further, negatively impacting every American,” says the letter.
“Even economists from your own party oppose your plan for raising demand and increasing inflation. Rather than addressing the rising cost of tuition for higher education or working to lower interest rates for student loans, your plan kicks the can down the road and makes today’s problems worse for tomorrow’s students.”
Advocates for student loan forgiveness have claimed Biden’s EO doesn’t go far enough, as Bloomberg reports. Senator Bernie Sanders of Vermont and Senator Elizabeth Warren of Massachusetts have advocated for an increase to $50,000 in forgiveness or total forgiveness, on the grounds that debt is “disproportionately held among women, Black borrowers, and other groups.”
An NBC News survey found the policy was popular, and that 46% of voters were more likely to support a pro-forgiveness character against 33% who actively opposed it. Gallup found Biden’s approval increased by 6% following the EO.
