Senate Minority Leader Mitch McConnell on Wednesday ripped President Biden’s plan to cancel hundreds of billions of dollars in student loan debt, calling it a giveaway to “elites with higher salaries” that does nothing to help working Americans who are struggling to pay their bills because of skyrocketing inflation.
Biden said that his administration will forgive up to $10,000 in federal loan debt for individual borrowers earning less than $125,000 a year or married couples earning less than $250,000 per year.
Recipients of Pell Grants could qualify for up to $20,000 in loan forgiveness.
“President Biden’s inflation is crushing working families, and his answer is to give away even more government money to elites with higher salaries,” McConnell said in a statement posted on Twitter. “Democrats are literally using working Americans’ money to try to buy themselves some enthusiasm from their political base.”
The Kentucky Republican also said the cancellation of the debt is a “slap in the face” to those Americans who saved for college, paid their debt or pursued other avenues.
“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,” McConnell added.
The Senate leader said Biden’s “cynical” plan is 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,” McConnell went on.
An analysis of Biden’s plan by the Penn Wharton Budget Model estimated that a one-time debt relief of up to $10,000 for borrowers making under $125,000 could cost taxpayers $300 billion.
By contrast, the Congressional Budget Office found earlier this month that the Inflation Reduction Act, referenced by McConnell, would only reduce the deficit by $102 billion over the next 10 years.
Another analysis, by the Committee for a Responsible Federal Budget, said without underlying reforms in the educational system to cut costs, the results of Biden’s debt relief would only be temporary — and that federal student loan debt would return to its current $1.6 trillion level within four years.
”In reality, debt cancellation would likely lead to increased borrowing, slower repayment, and larger tuition increases as borrowers and schools would expect another round of cancellation in the future,” the analysis said.
“Any behavioral changes would mean the portfolio would return even faster to its current size,” the committee concluded.
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