A “complete scam” is how a North Carolina congressman has labeled President Joe Biden’s recent proposal to shift the burden of student loan repayments from borrowers to taxpayers.
Republican U.S. Rep. Richard Hudson voiced his criticism late Monday on social media, stating, “Joe Biden’s ‘student loan forgiveness’ plan is a complete scam.” According to Hudson, it is fundamentally unjust to burden individuals who work tirelessly to earn a living with the responsibility of bailing out students who have either been unable or unwilling to repay the substantial debts they incurred to fund their college education. The congressman argues that such a move would be unfair to those who have toiled diligently to make ends meet and would only serve to reward individuals who have failed to fulfill their financial obligations.
The Education Department’s announcement challenged the traditional understanding of loans. The Under Secretary of Education, James Kvaal, stated that President Biden’s initiatives demonstrate his commitment to ensuring that college debt does not leave students worse off than before they attended college. Kvaal advised, “The president directed us to complete these programs as quickly as possible, and we are going to do just that.”
Approximately 74,160 individuals in North Carolina could receive more than $3.6 billion in relief, according to the U.S. Department of Education.
Traditionally, student loans involve a transaction where a certain amount of money is lent for future repayment, including principal and possibly interest, based on an agreement that considers the borrower’s financial standing and potential collateral.
A press release from the White House revealed that over 25 million individuals owe more than they initially borrowed. The Biden administration’s current plan will affect over 30 million borrowers.
Last year, President Biden proposed canceling $400 billion in student debt through the HEROES Act. However, the U.S. Supreme Court halted the plan, stating that it was not within the President’s authority to make such a decision.
Despite this setback, President Biden announced a new plan in July of 2023. That plan aimed to provide relief to around 800,000 student loan borrowers by allocating $39 billion. This money will be used to reimburse borrowers who were defrauded by their schools and to provide loan forgiveness for those who were victims of predatory lending practices.
However, not everyone was happy with this new plan. U.S. Representative Virginia Foxx, a Republican from North Carolina, has accused the Biden administration of disregarding the rule of law, hurting borrowers, and misusing taxpayer funds to gain publicity. She argues that the President does not have the authority to unilaterally forgive student debt and that doing so would be unfair to taxpayers who did not take out student loans.
As President Biden gears up for re-election on November 5, these plans represent just the beginning. Key student loan forgiveness initiatives include Public Service Loan Forgiveness, Income-Driven Repayment, Saving On A Valuable Education, and Total and Permanent Disability programs.
In February, Biden declared the cancellation of $1.2 billion in student loans for more than 150,000 borrowers through the SAVE program, prompting widespread criticism. U.S. Sen. Tom Cotton, R-Ark., highlighted on social media, “There is no such thing as student loan’ forgiveness.’ President Biden is simply transferring the debt to make you and your kids pay back student loans that you never took out.”
The Biden administration’s most recent proposal would cancel up to $20,000 in unpaid interest for millions of borrowers. The program is also expected to forgive the debt of certain groups of borrowers who fall under the following categories:
- Individuals who are currently eligible for debt cancellation through a government program but haven’t yet applied for it.
- Individuals who have been making repayments for 20 years or longer on their undergraduate loans or more than 25 years on their graduate loans.
- Individuals who have attended schools with questionable value.
- Individuals who are facing financial hardship.
According to the Biden administration, the U.S. Department of Education may start forgiving debts in the fall.
