Hinson, Mathis agree: Don’t cancel student loans – Sioux City Journal

U.S. House Democrats this week unanimously blocked a measure that would have stopped President Joe Biden from canceling hundreds of billions of dollars in student loan debt.

The amendment, introduced by Iowa Republican U.S. Rep. Ashley Hinson, would have prohibited the Biden administration from moving forward with its student loan debt cancellation plan.

Hinson offered the amendment during a House Appropriations Committee markup of a fiscal year 2023 Labor Health and Human Services and Education bill.

“Student loan debt cannot be ‘canceled,’ it can only be transferred onto the backs of hardworking Iowans and Americans,” Hinson said during her weekly call with Iowa reporters Friday.

“This will be paid for by those who chose not to go to college, or those who worked hard to pay back their loans already and did not have (debt). It’s simply not fair to be asking truck drivers, lineman, bartenders, electricians and plumbers to pay for someone else’s degree.”

Biden has said he intends to take a “hard look” at student loan forgiveness. As a candidate, Biden expressed an interest in canceling at least $10,000 in student debt per person. To date, he’s repeatedly extended a pause on requiring borrowers to repay their loans, a moratorium that was put in place under then-President Donald Trump near the beginning of the COVID-19 pandemic.

Hinson and her Democratic opponent in the fall election, state Sen. Liz Mathis of Hiawatha, find rare common ground on the issue.

“I had student loans, so did my kids,“ Mathis said in a statement. ”The cost of higher education is way too high, and we must do more to train people for the good paying jobs we need to fill here in Iowa. I have worked in the state Senate to bring down the cost of college and increase access to skills trainings.

“This proposal from the Biden administration solves neither problem. More blind spending is not a solution.”

THE NUMBERS

Students loans are now the second largest slice of household debt after mortgages, more so than credit card debt, with more than 43 million Americans holding a total of more than $1.7 trillion in outstanding debt. That’s nearly double the $828 billion held a decade ago, according to the Peter G. Peterson Foundation, a non-partisan organization addressing America’s long-term fiscal challenges.

Americans owe a greater average amount of student debt than at any time in U.S. history. About 21 percent of households owed an average of $42,000 in student debt in 2019, according to the foundation. By comparison, 8 percent of U.S. households held student debt 30 years before, and the average amount was $11,500 after adjusting for inflation.

Supporters argue forgiving student debt would free up younger generations to invest in their financial future, provide a moderate boost to the economy and help address racial and socioeconomic inequality.

Borrowers of color are more likely to hold student debt, owe more on average and often experience more difficulty repaying their loans than white borrowers, according to a study from the National Center for Education Statistics.

Opponents contend that the cost of such forgiveness would be much higher than the benefit to the economy, would disproportionately benefit higher-income Americans and fail to address the root cause of rising tuition costs that spurred more borrowing.

Hinson said widespread debt forgiveness would not be equitable, as student debt is mostly owed by middle- and higher-income borrowers.

According to JPMorgan Chase & Co., under the universal $10,000 cancellation, 12 percent of forgiven debt would go to the lowest 20 percent of earners, while 23 percent would go to the highest 20 percent of earners.

The White House has suggested there would be some kind of income criteria that would prevent high earners from benefiting.

‘ULTIMATE PROBLEM’

Hinson, who received a bachelor’s degree in broadcast journalism from the University of Southern California, said she was fortunate her parents “put away money for years so I could go to school” and graduate debt-free.

“We need to be addressing the ultimate problem here, which is the cost of education and access to training programs,” Hinson said.

The Marion Republican also said colleges and universities need to be empowering students to become smarter borrowers — improving student loan counseling services with information comparing their likely monthly income after expenses with their likely student loan payment so they can make smart decisions on the front end.

“There are a lot of ways where we can address the ultimate root cause here, which is the rising cost of education,” Hinson said. “But, I don’t think shifting that burden to taxpayers is fair at all.”