Q&A with Sen. Chuck Grassley
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Q: Do you support President Biden’s plan to wipe away student debt?
A: When something sounds too good to be true, it usually is. Once again, the Biden Administration is operating under the false assumption that money grows on trees. When the economy shut down in 2020, Congress passed a series of pandemic relief programs to help American families, rural hospitals and small businesses stay afloat. One of the financial lifelines was a pause on student loan payments and interest. Despite the economy opening back up and unfilled jobs holding back the recovery and forcing small businesses to cut back on services and hours of operation, the Biden administration unilaterally extended the deferral of payments to student borrowers repeatedly. This action pushes the cost of the student loan payment pause up to $150 billion. By pressing the pause button, President Biden is allowing high-earners with graduate degrees to defer monthly payments for two years and counting. But even that’s still not enough. Big spenders want President Biden to let student borrowers off the hook and walk away scot-free from their debt obligations. Iowans know that debt can’t be wiped away with a magic wand and vanish into thin air.
I often say Washington, D.C. is an island surrounded by reality. This proposal brings Fantasy Island to the banks of the Potomac River. And the taxpayer will pick up the tab.
Make no mistake. Canceling student debt is a sharp slap in the face for the generations of hard-working families and borrowers who saved, sacrificed and worked their way through school to pay their own way. For the millions of Americans who don’t attend college and carve out a career in the trades or climb their way up the retail and hospitality industries, the Biden administration would pick their pockets through higher taxes to pay off the $1.75 trillion in outstanding student loans. It’s a regressive proposal that most benefits people with advanced college degrees. They tend to have the highest debt, as well as higher salaries and higher lifetime earnings.
The bottom line is, the president does not have unilateral authority to snap his fingers and make a trillion dollars vanish. Congress holds the purse strings for a reason. And I’ll continue keeping a tight-fisted grip on taxpayer dollars. That’s why I recently joined Sen. John Thune on the Stop Reckless Student Loan Actions Act. This bill would explicitly prevent the president from unilaterally cancelling student debt, end the current student loan pause, and ensure that a pause can’t go on forever like this in the future.
Q: What are your initiatives to help prevent borrowers from getting in over their heads?
A: First off, let’s be clear why I oppose unilaterally canceling student debt. It’s a slippery slope of no return. Once Uncle Sam starts handing out freebies and erasing debts, the demand for get-out-of-debt giveaways would expand to car loans, home mortgages, credit cards and more. It also fosters a disincentive for families to save for their kids’ higher education.
Canceling student debt on today’s borrowers makes savers and borrowers who scrimped, saved and sacrificed to pay their own way look like chumps. It also gives colleges and universities the green light to keep raising tuition because Uncle Sam will eventually forgive the loans. President Biden’s proposal does nothing to curb runaway tuition costs.
I’ve written a trio of bills to help families and students navigate the true costs of college before they shoulder a mountain of debt. My Know Before You Owe Federal Student Loan Act would bring transparency into the process and help students understand whether their borrowing is in line with their likely income based on their degree so they fully factor in the cost of college. This has the added benefit of injecting the free market into the process to help bring down the price of higher education. It would also require counseling to show students their student loan payments compared to their likely projected income.
The Understanding the True Cost of College Act would create a universal financial aid award letter so students could compare financial aid packages among schools. The Net Price Calculator Improvement Act would provide students with individualized estimates of higher education costs and financial aid options before deciding where to apply. I’ve also introduced bipartisan legislation with Sen. Joni Ernst that would address skyrocketing loans and tuition by empowering students to understand up front the costs of what they are borrowing. Our Student Transparency for Understanding Decisions in Education Net Terms (STUDENT) Act would provide student loan applicants with an estimate of the total amount of interest they would pay based on a 10 year repayment plan during or prior to accepting a loan. Students seeking to earn an advanced degree will come out ahead if they’re smart about not getting in over their heads under a mountain of debt in the first place.
Republican Chuck Grassley has represented Iowa in the U.S. Senate since 1980.
