Debate over canceling student loan debt sparks political divisions on Capitol Hill
WASHINGTON (FOX 5 DC) - Could the government be moving to cancel college student loan debt? It's an issue that's gaining more attention as the Biden administration moves closer to a possible decision.
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The topic sparked political divisions on Capitol Hill on Thursday during a hearing.
It's estimated about 43 million Americans owe $1.6 trillion on their student loans. This is more than both credit card or car payments.
The political battle lines are sharp. Democrats argue canceling student debt would allow college-educated students to start their careers out from under the weight of loan payments many are struggling to make.
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"The overwhelming number of borrowers do work hard," says Sen. Sherrod Brown of Ohio. "They do play by the rules. Go to college? Check. Get a job? Check. Work hard every day? But instead of achieving the American dream, borrowers are trapped in debt and economic instability."
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Progressives have been clamoring for President Biden to sign an executive order wiping out billions in student loan debt, but the commander-in-chief had been hesitant to take a step some doubt is even legal. That changed this week when he acknowledged it’s under consideration. Young Voices contributor Albert Eisenberg, who wrote an op-ed on the topic for FoxNews.com, tells Jim on "The Final 5" why he believes it would be a bad move.
Republicans say a loan is not a gift and if students can't pay back their loans, they shouldn't have taken out the loans in the first place, leaving the bill to taxpayers.
"It’s almost never acceptable for the taxpayers to be forced to be responsible for someone else’s voluntarily privately incurred debt," says Sen. Patrick Toomey of Pennsylvania. "Cancelation of student debt obscures the root cause of the problem here, and the root cause of the problem is the outrageously high cost of higher education."
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Witnesses testifying on Capitol Hill Thursday that escalating interest payments are trapping college loan recipients in a cycle of debt that they can't escape even if they keep making payments.
It's a growing problem for younger people who have assumed more and more debt to finance their educations when public funding for colleges has declined.
"People are making payments only to see their balance increase due to interest and when we look at loan issues each year since 2009, the majority of those balances are increasing rather than being paid down," says Dr. Jalil Mustaffa Bishop of Villanova University.
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The Biden administration is currently weighing how much federal student loan debt could be canceled and who should benefit. Republicans argued on Thursday that the president does not have the legal authority to forgive those debts.