Sen. McConnell: President Biden's college debt forgiveness plan is 'student loan socialism'

Mitch McConnell
Posted at 2:51 PM, Aug 24, 2022
and last updated 2022-08-24 14:51:03-04

(LEX 18) — Senate Minority Leader Mitch McConnell says President Biden's student loan forgiveness plan is unfair to those who already paid off their debt.

"President Biden's student loan socialism is a slap in the face to every family who sacrificed to save for college, every graduate who paid their debt, and every American who chose a certain career path or volunteered to serve in our Armed Forces in order to avoid taking on debt," he said.

The plan would forgive up to $20,000 worth of student loan debt for borrowers who received Pell Grants. People who didn't receive a Pell Grant are eligible for up to $10,000 in loan forgiveness, the president said. The government will only cancel debt for people making less than $125,000 a year.

In addition to canceling student loan debt, Biden will extend the repayment pause until Dec. 31. He said this will be the last extension of the pause, which began due to the pandemic.

Sen. McConnell claimed the plan would make inflation worse. Read his full statement below:

"Washington Democrats have found yet another way to make inflation even worse, reward far-left activists, and achieve nothing for millions of working American families who can barely tread water.

"President Biden’s student loan socialism is a slap in the face to every family who sacrificed to save for college, every graduate who paid their debt, and every American who chose a certain career path or volunteered to serve in our Armed Forces in order to avoid taking on debt. This policy is astonishingly unfair.

"The median American with student loans already has a significantly higher income than the median American overall. Experts who studied similar past proposals found that the overwhelming benefit of student loan socialism flows to higher-earning Americans. Democrats specifically wrote this policy to make sure that people earning six figures would benefit.

"President Biden's inflation is crushing working families, and his answer is to give away even more government money to elites with higher salaries. Democrats are literally using working Americans’ money to try to buy themselves some enthusiasm from their political base.

"This is cynical and outrageous but perfectly in character for these Democrats. Just a few weeks ago, every Senate Democrat voted to tax American manufacturing, ignore inflation, and spend hundreds of billions of dollars on things like electric car charging stations, 'environmental justice' grants, and 87,000 new IRS agents.

"This is the one consistent thread that connects Democrats’ policies: Taking money and purchasing power away from working families and redistributing it to their favored friends."

In a similar statement, Congressman Andy Barr, who represents Kentucky's 6th district, says the federal student loan forgiveness plan as an "inflationary student loan giveaway."

Read Barr's full statement below:

"During a recession that is crushing low- and middle-income Americans, President Biden wants to engineer one of the largest wealth transfers to high end earners at the expense of blue-collar workers. Democrats’ hypocrisy knows no bounds. Nearly a third of student loan debt is held by the top 20 percent of earners and 56 percent of student debt is held by households with graduate degrees. Biden’s cynical politically motivated ploy would bail out the wealthiest 20 percent of American households at the expense of other hardworking low- and middle-income Americans, setting a dangerous precedent for wealthy Americans to go to college and later expect non-college educated working families to pay off loans that they promised to pay back. I guess the left has abandoned its "tax the rich" mentality.

"President Biden’s student loan bailout plan is not only unfair to hardworking taxpayers who didn’t go to college, it is a slap in the face to Americans who worked hard and paid off their student loans, or didn’t even take out loans and used their own savings. Furthermore, President Biden’s unfunded plan will add $300 billion to the national debt which has already soared to over $30 trillion as a result of Democrats’ reckless spending. Finally, this plan does nothing to discourage tuition inflation, which is the direct result of excess federal subsidization of higher education."

According to the Kentucky Center for Economic Policy, around 616,000 Kentuckians have student debt and the average amount of debt is $33,300. Approximately 209,400 of them owe $10,000 or less and will qualify to have their debt wiped out entirely. Another 406,200 will have a portion of their debt canceled, assuming they don't meet the $125,000/year income cap.

This nonprofit referred to the plan as a "good first step" that will help thousands of Kentuckians whose lives and economic choices "suffer under the weight of student debt."

"Student debt cancellation can relieve enormous financial stress facing families and benefit the economy as a whole," the Kentucky Center for Economic Policy said. "Some Kentuckians have delayed moving ahead with homeownership, starting a business, saving for retirement or making other important investments because of their student loan balances."

Approximately 43 million Americans have federal student loan debt, which totals $1.6 trillion.