Statement by Senator Cramer on Biden’s Student Debt Cancellation Announcement

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FARGO, ND – U.S. Senator Kevin Cramer (R-ND) released the following statement after President Joe Biden announced the forgiveness of up to $10,000 in federal student loan debt per borrower and up to 20 $000 in debt for some borrowers who had previously received a Pell Grant. President Biden’s unilateral decision to cancel student loan debt for some borrowers also included an extension of the payment pause until December 31, 2022.

“Just when you think Joe Biden can’t make inflation worse than he already has, he’s doing this trick. Not only will this ‘free money’ fan the flames of Biden’s inflation further, but it is fundamentally unfair to the millions of Americans who have no student loan debt to repay. Transferring student loan debt to people who have repaid it or who never accumulated any in the first place is a theft, and taxpayer voters will be rightly outraged,” said Senator Cramer.

Background:

Sen. Cramer opposed the nomination of Education Secretary Miguel Cardona because of the administration’s progressive agenda that encourages teachers’ unions and boasts of canceling student debt.

Free debt cancellation provides a perverse incentive to borrow and spend money one does not have, while undermining those who pay faithfully or have repaid their student loans responsibly. Senator Cramer discussed the perverse incentives and inflationary consequences of canceling student loans yesterday on Mornings with Maria.

“The loan forgiveness suggestion would create so many perverse incentives starting with — to Larry Summers’ point — tuition increases. This is what creates an excess supply of money in a market with low demand. This creates inflation. If you gave every American child $1,000 to go toward their next semester of college, the price of college would go up by $1,000,” said Senator Cramer.

The United States Department of Education already offers income-based repayment plans for low-income borrowers as well as occupational or situation-specific federal loan forgiveness programs, including the Teacher Loan Forgiveness program, the Public Service Loan Forgiveness or military service related programs.

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