A group of 22 Republican governors sent a letter calling on President Joe Biden to immediately withdraw his plan to cancel student loan debt.
The coalition believes the move will cause a disproportionate amount of harm to the majority of taxpayers while only benefiting 16-17% of Americans who have federal student loan debt.
“We fundamentally oppose your plan to force American taxpayers to pay off the student loan debt of an elite few—a plan that is estimated to cost the American taxpayer more than $2,000 each or $600 billion total, a price the people of our states cannot afford,” the governors wrote.
“Borrowers with the most debt, such as $50,000 or more, almost exclusively have graduate degrees, meaning hourly workers will pay off the master’s and doctorate degrees of high salaried lawyers, doctors, and professors,” the group noted. “Simply put, your plan rewards the rich and punishes the poor.”
Biden announced in August that his administration would cancel $20,000 in debt for Pell Grant recipients and $10,000 for other borrowers who individually make less than $125,000 or couple who makes less than $250,000. Anyone with undergraduate, graduate, and Parent Plus loans can potentially be relieved of debt. Approximately 43 million people are eligible – 20 million of whom would have their entire remaining federal debt balance forgiven.
After several delays due to the COVID-19 pandemic, student debt payments are currently set to restart in January of 2023.
The governors who oppose the federal government’s student debt forgiveness plan say the move will not address the “rising cost of tuition for higher education” or in any way “lower interest rates for student loans.”
“Your plan kicks the can down the road and makes today’s problems worse for tomorrow’s students,” the co-signers wrote.
“At a time when inflation is sky high due to your unprecedented tax-and-spend agenda, your plan will encourage more student borrowing, incentivize higher tuition rates, and drive-up inflation even further, negatively impacting every American,” the governors added. “Even economists from your own party oppose your plan for raising demand and increasing inflation.”
The effort was led by Iowa Governor Kim Reynolds.
“Your loan, your responsibility,” Reynolds told the Creston News Advertiser. “I support affordable and accessible higher education, but I don’t support it at the expense of other American taxpayers.”
The letter was signed by the governors of Alabama, Alaska, Arizona, Arkansas, Florida, Georgia, Idaho, Maryland, Missouri, Montana, Nebraska, New Hampshire, North Dakota, Ohio, Oklahoma, South Carolina, South Dakota, Tennessee, Texas, Utah, and Wyoming.
Several Republican senators, including Iowa’s Chuck Grassley and Missouri’s Josh Hawley, have called for a legal challenge to Biden’s order, arguing that it is an overreach of federal and executive power.
Biden’s debt cancellation plan is not subject to federal income tax but is subject to income tax in seven states – North Carolina, Indiana, Mississippi, Arkansas, Minnesota, Wisconsin, and California.
