Austin, Texas – Government. Greg Abbott Twenty-one Republican governors on Monday joined in urging President Joe Biden to cancel his student loan forgiveness plan, asserting that thousands of dollars in individual debt relief will hurt the working class.
referees wrote in a letter That Loan Forgiveness Scheme offers a bailout to a minority of largely well-off Americans, arguing that those “with the most debt, like $50,000 or more, almost exclusively have college degrees, which means hourly workers will pay their masters and doctorate degrees with higher degrees of Lawyers, doctors and professors with high salaries.
But most of those people will not qualify for the loan forgiveness program announced last month, which excludes anyone earning more than $125,000. Eligible applicants are limited to $10,000 in relief, unless they are recipients of Pell Scholarships, which are intended for low-income students, in which case they can receive up to $20,000 in relief. The program also proposes a new payment plan that sets monthly college loan payments at 5% of the borrower’s discretionary income — with monthly payments roughly halved.
See related story: What is a Pell Scholarship? How does this affect millions of people being forgiven for student loans
The White House justifies the program with the high price of university education and the increasing demand for high school diplomas to remain competitive in the labor market. According to the Department of Education, the typical college student who takes out college loans leaves with nearly $25,000 in debt. The White House argues that rising education costs have also discouraged thousands of students from completing their studies, burdening them with debt but without a degree. The White House also described the relief program as part of its response to the pandemic.
Check out the related story: Who Benefits From Biden’s Student Loan Forgiveness Scheme, How Much Debt Can Be Canceled
In 2021, 56% of students who graduated from public four-year universities in Texas had student debt of approximately $25,000, according to the Texas Higher Education Coordinating Council.
In 2019, 81% of black students who graduated with a bachelor’s degree in Texas had some type of debt, compared to 52% of white graduates in Texas. The average debt burden for black graduates was about $4,000 higher than for white graduates, hovering around $30,311.
Student loan forgiveness has long been a major policy goal among Democrats, including Biden’s 2020 campaign. Its proponents say student debt prevents graduates from economic mobility and discourages prospective students from pursuing an education that can improve their financial prospects.
But there are deep divisions even among Democrats over how far student loan forgiveness should go. Progressives were unhappy with the amount of comfort in Biden’s plan, as US Senator Bernie Sanders called for free higher education and the complete abolition of student loans.
There are limits to Biden’s power to forgive student loans. House Speaker Nancy Pelosi asserts that only Congress, as the custodian of the fiscal portfolio, can erase all student loan debt, and Republicans, including the US senator. Ted Cruz, challenged the legal authority of Biden’s more modest plan. The administration can constitutionally only spend the money allocated to it by Congress.
“This administration is exceeding its legal authority and illegally burdening hard-working Americans with debts they have not incurred,” Cruz said in a statement last month.
Legal issues aside, Republicans have rejected the idea of loan forgiveness outright, arguing that it was unfair to students who had paid off their loans and fearing that any additional surge in liquidity would exacerbate the nation’s high inflation. They also protested tax money from Americans who had never gone to college in order to get student loan forgiveness.
“Simply put, your plan rewards the rich and punishes the poor,” the conservatives wrote in their letter on Monday.
Other signatories run the ideological chain of Republican governors, including hardliners like Ron DeSantis of Florida and moderates like Larry Hogan of Maryland.
The White House did not immediately respond to a request for comment.
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