[Congressional Record Volume 169, Number 147 (Tuesday, September 12, 2023)]
[Senate]
[Pages S4361-S4362]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]
Student Loans
Mr. THUNE. Mr. President, 3 weeks ago, President Biden officially
launched the second part of his student loan giveaway--his dramatic
overhaul of the REPAYE program, an income-driven repayment plan for
Federal student loans.
The President's revamp flew under the radar a bit when it was first
announced, overshadowed by his plan to forgive up to $10,000 of student
loan debt outright--or $20,000 for Pell grant recipients. But the truth
is that the President's new income-driven repayment plan, which he has
dubbed the Saving on a Valuable Education plan--or the SAVE plan--is
just as problematic, if not more, as the President's scheme to forgive
student debt outright because the new SAVE plan will create a system in
which the majority of future Federal borrowers will never fully repay
their student loans.
The nonpartisan Penn Wharton Budget Model estimates that just 24.6
percent of future borrowers will repay their loans in full--in other
words, less than a quarter of borrowers.
The Department of Education estimates that borrowers with only
undergraduate debt enrolled in the SAVE program can, on average, expect
to pay back just $6,121 for each $10,000 they borrow. That amount the
Federal Government is taking on, on average, is almost 40 percent of
the cost of these undergraduates' student loans.
Let's call this what it is: It is loan forgiveness by another name.
You don't have to take my word for it.
One scholar from the left-leaning Urban Institute had this to say on
NPR the other day:
I think it's going to be less obvious that it's a big loan
forgiveness program to both borrowers and onlookers as well.
But, yeah, it's a big loan forgiveness program. . . . So no
longer a safety net like it has been in the past for
undergraduates--this looks more like a broad-based subsidy
for undergraduate degrees through loan forgiveness.
That, from a scholar at the left-leaning Urban Institute. Let me
repeat that: ``a broad-based subsidy for undergraduate degrees through
loan forgiveness.''
Or, in other words, in the words of one scholar from the American
Enterprise Institute, ``a functional entitlement program'' whose costs,
he adds, ``will prove difficult to control.''
I don't need to tell anyone that the problems here are myriad. Just
think about it. For starters, someone is going to have to bear the cost
of all these unrepaid student loans. And that someone is the American
taxpayers, including taxpayers who worked hard to pay off the full
balance on their own student loans, without a handout from the Federal
Government, and taxpayers who worked their way through school to avoid
a heavy loan burden and parents who scrimped and saved to send their
children to college debt-free and individuals who covered the cost of
their education by enlisting in the military and risking their lives
for their country. And I could go on.
I am at a loss to understand why taxpayers, as a whole, should assume
a substantial part of the educational burden for individuals, who, if
they graduated from college, have greater long-term earning potential
than many of the Americans who will be helping to shoulder the burdens
for their debts.
And, of course, this program isn't just being offered to help
undergraduate debt. No. Graduate students, including those in
professional degree programs like medical school and law school, will
also be eligible for the so-called SAVE program.
And I don't need to tell anyone that the lifetime earning potential
of a doctor or a lawyer is usually pretty good. But leaving aside
questions of fairness, let's talk about the costs of this de facto new
entitlement program. Again, the Penn Wharton Budget Model estimates the
SAVE program will cost roughly half a trillion dollars over the next 10
years.
We have a national debt today of $32 trillion and a Federal budget
that has increased by 41 percent since 2019. Contrary to what President
Biden seems to believe, we can't afford to be constantly expanding
government programs. We simply don't have the money to be subsidizing
the college--and graduate--education of a group of people whose earning
potential will exceed the earning potential of a lot of the people
subsidizing their schooling.
Perhaps the worst thing about the President's new program is that we
will be spending all that money and doing nothing--nothing--to solve
the real problem, and that is the high cost of a college education.
President Biden's student loan giveaway provides actually zero--
exactly
[[Page S4362]]
zero--incentive for colleges to contain costs. In fact, there is reason
to fear that it could actually encourage colleges to raise their prices
or, at least, make them significantly less reluctant to do so.
And, of course, the President's proposal does nothing to discourage
students from borrowing substantial amounts of money to finance their
education. Indeed, there is a good chance students will increase their
borrowing as a result of the President's plan.
The President's ill-conceived student loan giveaway is a tremendous
disservice to taxpayers--and a terrible move for our economic health.
As I said, it does nothing to address the real problem, which is the
high cost of higher education, which is why last week, I joined Senator
Cassidy to introduce a resolution of disapproval to block the
President's plan. And I encourage Members of both parties to support
this resolution. Anyone who cares about actually addressing the cost of
higher education should oppose a program that not only fails to solve
the underlying problems but is actually likely to make things worse.
I yield the floor.
I suggest the absence of a quorum.
The ACTING PRESIDENT pro tempore. The clerk will call the roll.
The legislative clerk proceeded to call the roll.
Mrs. HYDE-SMITH. Mr. President, I ask unanimous consent that the
order for the quorum call be rescinded.
The ACTING PRESIDENT pro tempore. Without objection, it is so
ordered.