Estimated read time: 3-4 minutes
This archived news story is available only for your personal, non-commercial use. Information in the story may be outdated or superseded by additional information. Reading or replaying the story in its archived form does not constitute a republication of the story.
SALT LAKE CITY — Utah Gov. Spencer Cox joined nearly half of the governors across the nation on Monday in a letter to President Joe Biden, denouncing the president's student loan forgiveness plan and asking for it to be withdrawn.
Under the plan, borrowers who earn less than $125,000 a year, or families earning less than $250,000, would be eligible for $10,000 in loan forgiveness. For recipients of Pell Grants, the federal government would cancel up to an additional $10,000 in federal loan debt.
While the letter to Biden says the governors are in support of making higher education more affordable, they said that they "fundamentally oppose your plan to force American taxpayers to pay off the student loan debt of an elite few."
The White House estimates that the forgiveness plan will benefit approximately 43 million borrowers.
Cox was joined by governors of Alabama, Alaska, Arizona, Arkansas, Florida, Georgia, Idaho, Iowa, Maryland, Missouri, Montana, Nebraska, New Hampshire, North Dakota, Ohio, Oklahoma, South Carolina, South Dakota, Tennessee, Texas and Wyoming in signing the joint letter opposing the plan.
They said that "shifting the burden of debt from the wealthy to working Americans" will harm lower-income families and drive inflation.
"For many borrowers, they worked hard, made sacrifices and paid off their debt. For many others, they chose hard work and a paycheck rather than more school and a loan. Americans who did not choose to take out student loans themselves should certainly not be forced to pay for the student loans of others," the letter states.
Opinions on how the forgiveness plan will impact the economy differ among experts.
Lawrence Summers, former director at the National Economic Council, said in a tweet that "student loan debt relief is spending that raises demand and increases inflation," indicating that inflation will be observed by a rise in tuition.
Joseph Stiglitz, the chief economist at the Roosevelt Institute, wrote in the Atlantic that "whatever your view of student-debt cancellation, the inflation argument is a red herring and should not influence policy."
The governors also call into question Biden's process of passing the plan, saying that he lacks the "authority to wield unilateral action to usher in a sweeping student loan cancellation plan."
The letter called on Biden to "immediately" withdraw his student loan plan.
"At a time when inflation is sky high due to your unprecedented tax-and-spend agenda, your plan will encourage more student borrowing, incentivize higher tuition rates, and drive up inflation even further, negatively impacting every American," the letter says. "Even economists from your own party oppose your plan for raising demand and increasing inflation. Rather than addressing the rising cost of tuition for higher education or working to lower interest rates for student loans, your plan kicks the can down the road and makes today's problems worse for tomorrow's students."
Cox is not the first Utah politician to speak against the plan, as Sen. Mitt Romney last month called the plan a "bribe" to win votes for Democrats.
Sad to see what's being done to bribe the voters. Biden's student loan forgiveness plan may win Democrats some votes, but it fuels inflation, foots taxpayers with other people's financial obligations, is unfair to those who paid their own way & creates irresponsible expectations.
— Senator Mitt Romney (@SenatorRomney) August 24, 2022
Romney wasn't alone among Utah's congressional delegation to oppose Biden's plan, as Rep. Blake Moore, R-Utah, also tweeted a statement in opposition.
President Biden's announcement isn't a real solution because it doesn't get to the root of the problem. University costs continue to skyrocket. Student loan forgiveness only places the brunt of its financial consequences on the next generation. #utpolpic.twitter.com/VvFAYVwrqf
— Congressman Blake Moore (@RepBlakeMoore) August 24, 2022
Utah Republican Sen. Mike Lee echoed many of the sentiments of the governor's letter to Biden, saying his plan will further fan the flames of inflation, ignore the rising cost of higher education, disproportionately favor the wealthy, and create greater income inequality.
This "plan" from the Biden Administration will:
— Mike Lee (@SenMikeLee) August 24, 2022
- Further fan the flames of inflation.
- Ignore the rising cost of higher education.
- Disproportionately favor the wealthy.
- Create greater income inequality. https://t.co/c92LR5UphR
The full letter to Biden can be read here.
