Idaho Gov. Brad Little is one of 22 governors across the country to sign a letter to President Joe Biden opposing his plan to forgive a portion of student loan debt, saying the plan will encourage more student borrowing, incentivize higher tuition rates and exacerbate inflation.
The governors of Montana, Alaska, Utah and Wyoming also signed the letter that was sent to the White House on Monday.
Biden announced a plan to forgive up to $10,000 in student loan debt for individuals with an income of less than $125,000, and $250,000 for a household’s income. That amount is extended to $20,000 for borrowers who received Pell Grants as students, a program for undergraduate students who come from households with the lowest incomes. Pell Grant recipients are still subject to the income thresholds.
“Only 16-17% of Americans have federal student loan debt, and yet, your plan will require their debts be redistributed and paid by the vast majority of taxpayers,” the letter states.
According to the Education Data Initiative, 34% of adults between the ages of 18 and 29 and 22% of adults between the ages of 30 and 44 owe student loan debt. Borrowers between the ages of 25 and 34 owe an average of $33,429, or about 69% of their median annual income.
The governors also say the plan shifts the burden of debt from the wealthiest Americans with a “regressive impact that harms lower income families.”
“Simply put, your plan rewards the rich and punishes the poor,” the letter said.
In Idaho, according to the Education Data Initiative, the median annual income for those who hold student loan debt is $60,999, while the average student debt is $33,100.
The governors wrote that many borrowers worked hard, made sacrifices and paid off their debt, and Americans who chose not to take out student loans should not be forced to pay for the loans of others.
“A high-cost degree is not the key to unlocking the American Dream – hard work and personal responsibility is,” the letter said.
A recent Penn Wharton budget model found that a one-time loan forgiveness of $10,000 would mostly benefit borrowers in the bottom four lowest quintiles of incomes, ranging in incomes from $28,784 to $82,400.
Some economists, including Larry Summers, who served as director of the National Economic Council under former President Barack Obama, have said the plan will worsen inflation. Other economists say the effect will be minor.
“Bipartisan opposition to your plan includes more than economic objections but process problems as well. As president, you lack the authority to wield unilateral action to usher in a sweeping student loan cancellation plan, a position shared by leaders of your party,” the letter said, citing a quote from Speaker of the House Nancy Pelosi, D-California, saying only Congress has that power.
“For these reasons and more, we call on you to withdraw your student loan plan immediately.”
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