Student Loan Debt

Floor Speech

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Mr. THUNE. Mr. President, earlier this month, 16 Democratic Senators introduced a resolution calling for President Biden to forgive $50,000 of Federal student loan debt per borrower--$50,000.

There is no question that student loan debt is a problem for many Americans. College costs have risen to unrealistically high levels, and many students or their parents take out unrealistic amounts of debt in response. But the answer to this problem is not to have the President or Congress simply step in and forgive a large chunk of student loan debt.

To start with, Democrats' plan is incredibly, fundamentally unfair. Right now, there are individuals around this country who have just paid off the last of their student loans. They have been working hard, making payments, sometimes for a couple of years, sometimes for a couple of decades, as was the case with me. What happens to these individuals if the President steps in and forgives $50,000 of student debt? Well, I will tell you what happens--nothing. These individuals who have worked hard for years to pay off their debt will see no benefit from the Democrats' blanket loan forgiveness. Meanwhile, other Americans who have made no more than a month or two of payments will see their student loans entirely disappear. That is incredibly unfair. In addition to being unfair, forgiving student loan debt does absolutely nothing to address the problems that created this debt crisis in the first place. In fact, the Democrats' solution is likely to make things worse.

What possible incentive will students have to take the responsible approach to borrowing if they think the Federal Government will step in and solve their debt problem? What incentive will colleges have to restrain tuition growth if they think they can rely on the Federal Government to subsidize their students' tuition fees through loan forgiveness?

Forgiving $50,000 in student loans would also set a terrible precedent on the sanctity of contracts. While it may at times be ill- advised, students freely enter into the agreements they make when they take out a loan. Should we really be teaching that agreements and contracts mean nothing, that people can incur debt and then not have to pay it off? And about that ``not paying it off,'' the phrase ``student loan forgiveness'' carries with it a suggestion that these debts will just disappear, that $50,000 can be wiped off each American's slate and vanish into the ether.

But, of course, we know that is not the case either. This is money students have borrowed from the Federal Government, and if the Government doesn't get that money back, the Government will be facing an unexpected debt.

Now, some people, especially some Democrats, tend to talk as if the Government draws on an unlimited pot of money, but, of course, we know that is not true. Government funds aren't anywhere close to being unlimited, and Government coffers are not filled from a pot of gold at the end of the rainbow. They are filled by taxpayer dollars, and, sooner or later, it will be taxpayers who foot the bill for any loan forgiveness program, including the many taxpayers who opted not to attend college or chose a debt-free way of doing so. There are a lot of Americans out there who saved up to get a degree or went part-time to avoid incurring debt. Are they really supposed to foot the bill for other Americans' student loans?

While you might think that Democrats' plan is largely targeted to low-income or disadvantaged individuals, that is not actually the case. Under the Democrats' plan, an American making $20,000 and an American making $120,000 would receive the same loan relief. In fact, since more loan dollars are held by those in higher income brackets, higher income Americans could end up benefiting the most. And that brings up another thing that we need to remember.

Yes, a number of Americans carry a significant amount of student loan debt, but some of those Americans have incurred that debt for a career that will bring significant financial rewards.

Plus, a substantial portion of student loan debt is not for undergraduate degrees but for graduate and professional degrees. Under the Democrats' student loan forgiveness proposal, taxpayers could be subsidizing not just bachelor's degrees but master's degrees and Ph.D. degrees, as well as law and medical degrees.

Instead of putting taxpayers on the hook for billions, we should be focused on exploring ways to drive down education costs and educate students on the dangers of taking on excessive debt.

We should also be highlighting affordable education options like our Nation's community and technical colleges. These colleges, like the outstanding institutions we have in South Dakota, provide students with associate's degrees, certificates, apprenticeships, opportunities to learn a trade, and more.

There are also things we could do to help students pay off loans without putting taxpayers on the hook for such massive amounts of money. In December, Congress passed a 5-year legislation that I introduced with Senator Warner to allow employers to help employees repay their loans. Our Employer Participation and Repayment Act amends the Educational Assistance Program to permit employers to make tax-free payments on their employees' student loans.

Previously, employers could make tax-free contributions to their employees' tuition if their employees were currently taking classes, but they couldn't provide tax-free contributions to help employees with education debts that they had already incurred. Our bill allows them to make tax-free contributions to help with employees' already existing student loan debt. That is a win-win situation. It is a win for employees who get help paying off their student loans, and it is a win for employers who have a new option for attracting and retaining talented workers.

Our bill is not a silver bullet, but it will certainly help ease the pain of paying back student loans for a number of young Americans. I am pleased it was enacted into law for a 5-year period, and I hope Congress will act to make it permanent.

Another big thing we could do is make sure that graduates have access to good-paying jobs. This is key to enabling people to pay off their debt, and we should resolve to build on the economic progress that we had made prepandemic and focus on policies that will allow our economy to grow and to thrive.

High college costs and student debt are a problem, but blanket loan forgiveness is not the answer. I hope that President Biden will resist Democratic calls to put taxpayers on the hook for literally billions and billions of dollars in student loans.

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