Saddling Idahoans with student loan cancellation is irresponsible, unaffordable

The higher education system warrants careful review as rising tuition costs and the amount of student loans disbursed for education saddle students and graduates with financial difficulties. But, placing the burden of our nation’s outstanding student loan debt on taxpayers, including Idahoans who have worked hard to pay back their loans, is irresponsible and unaffordable. Student loan relief is not free; it must be paid for in part by the overwhelming majority of Americans who do not benefit but are impacted by record-high inflation. The Committee for a Responsible Federal Budget estimates all of President Biden’s student loan policies may cost taxpayers as much as $1.4 trillion.

President Biden’s July 18, 2024, cancellation of the student loan debt of 35,000 public service workers and the 8th U.S. Circuit Court of Appeals’ blocking of the Administration’s ongoing student debt relief plan that same day are some of the latest developments in this ongoing debate. The following are some of the initiatives I have supported to combat this transferal of debt onto taxpayers:

On August 24, 2022, the Biden Administration announced the cancellation of $10,000 of student loan debt under specific earning thresholds using a questionable interpretation of the HEROES Act, enacted as a response to the September 11, 2001, terrorist attacks to provide student loan relief during a national emergency. In response to this egregious misuse of federal law, I joined in introducing a resolution to nullify this rule, which Congress passed with bipartisan support but the President vetoed. Ultimately, on June 30, 2023, the U.S. Supreme Court struck down the Biden Administration’s August 2022 proposal, determining the Administration lacked authority under the HEROES Act to unilaterally cancel student loan debt.

I joined in introducing a separate resolution to overturn President Biden’s illegal Income-Driven Repayment Program, which was announced immediately following the Supreme Court’s June 2023 decision. I voted in favor of this resolution when it failed on a mostly partisan vote of 49-50.

I have also joined in raising concerns about the impacts and dubious legality of President Biden’s various attempts at broad student loan bailouts, while calling on the Administration to work with Congress on financially sustainable solutions to the issues that exacerbate student loan debt. Most recently, I joined more than 120 lawmakers in sending a letter to U.S. Department of Education Secretary Miguel Cardona in opposition to the April 8, 2024, unilateral cancellation of student debt incurred by nearly 30 million borrowers. 

Broad student loan debt cancellation does not address the underlying issue, which is the exorbitant cost of tuition. Mass cancellation only worsens the ballooning tuition costs, as students may be inclined to borrow more and colleges will raise expenses even faster. According to the CRFB, student debt will return to its current level of $1.7 trillion by 2028 if there are no policy changes to address rising education costs.

While we must find solutions that reduce the financial burden on students and graduates, mass student loan debt cancellation is regressive policy that benefits few Americans, disproportionately rewards the affluent, and is unfair to those who never went to college, paid back their student debt or never took out any student loans. The wealthiest 20 percent of households hold three times as much loan debt as the bottom 20 percent, and more than half of the loan debt is held by graduate school borrowers.

Misguided policies such as blanket student loan debt forgiveness also exacerbate the enormous national debt when it is far past time to start seriously working to get our financial house in order. I am committed to restoring the federal budget to balance, and this effort requires careful scrutiny of all programs funded by Idaho taxpayers. With this in mind, we must seek commonsense reforms to the federal student loan program that will properly align incentives and reduce the burden on students and graduates without negatively affecting our nation’s economic growth.

Mike Crapo represents the state of Idaho in the U.S. Senate. He can be reached at crapo.senate.gov.