Loan payment

Extending student loan payment suspension ‘a terrible idea’: Tom Cotton

  • GOP Sen. Tom Cotton said another extension of the student loan payment suspension is “a terrible idea.”
  • He added that broad loan relief will cost taxpayers — a notion other GOP lawmakers have referenced.
  • But Democratic lawmakers argue that canceling student debt will boost the economy.

Student loan repayments are expected to resume in just over two months, and borrowers are wondering if Biden could grant them another payment break extension. But a Republican lawmaker doesn’t want that to happen.

“The Biden administration is considering extending the student loan moratorium. This is a terrible idea,” Sen. Tom Cotton of Arkansas wrote on Twitter last week.

He added that the student loan payment breaks will “put taxpayers on the back foot for trillions” while allowing college graduates to avoid paying the debt they owe.

Student loan payments have been suspended since March 2020 as part of the pandemic relief measures implemented by President Donald Trump and President Joe Biden. Biden extended the hiatus for the third time under his leadership in December, through May 1, and many Democratic lawmakers and advocates argue that if the relief can continue to be extended, there’s no reason Biden should. cannot completely eliminate the $1.7 trillion student debt crisis. . But Cotton and other Republican lawmakers think otherwise.

North Carolina Rep. Virginia Foxx — the top Republican on the House Education and Labor Committee — said in January that Biden’s “latest extension is a troubling trend toward the wholesale cancellation of student loans, which which would be a massive mistake, with major consequences for borrowers and taxpayers.”

She cited the $150 billion cost to taxpayers that accompanied Biden’s further extension of the payment pause and said the president was acting to ‘satisfy the progressive wing of the Democratic Party – this political theater is unacceptable’. .

In a different tweet last week, Cotton reference the “political theater” and said Senate Majority Leader Chuck Schumer – a leading advocate for canceling the $50,000 student debt per borrower – will continue to wear his “cancel the debt” face mask. student debt” “until Biden does or New York’s primary filing deadline passes—whichever comes first.”

Indeed, canceling student debt is a big election issue, and some Democrats have expressed concerns about their success at the polls if it doesn’t happen. New York Rep. Alexandria Ocasio-Cortez has previously said it’s “delusional” to think Democrats can win without acting on progressive priorities, like student loan relief, and some voters themselves have expressed their disappointment at the lack of action on the issue.

Despite the GOP pushback on broad-based student loan relief, many Democrats maintain the view that canceling student debt will boost the economy and help low-income borrowers the most. Massachusetts Senator Elizabeth Warren told Insider last year that “preventing tens of millions of people from participating in this economy, taking money out of their pockets – money that ‘they spend in local stores and the money they spend to keep this economy going – is not helpful.”

And Marshall Steinbaum, senior fellow at the Jain Family Institute and professor of economics at the University of Utah, previously told Insider that the economy is doing “more than fine” without student debt payments.

“It’s basically kind of a ball and chain around a lot of people’s ankles that came up early in the pandemic,” Steinbaum said. “And I suspect it had a major positive effect on their financial well-being and purchasing power.”