Idaho america

Idaho Governor Brad Little signs letter opposing student loan cancellation plan

Idaho Governor Brad Little is one of 22 governors across the country to sign a letter to President Joe Biden opposing his plan to forgive some student loan debt, claiming that the plan will encourage more student loans, incentivize higher tuition fees and exacerbate inflation.

The governors of Montana, Alaska, Utah and Wyoming also signed the letter which was sent to the White House on Monday.

Biden announced a plan to forgive up to $10,000 in student loan debt for people with incomes below $125,000 and $250,000 for household income. This amount is increased to $20,000 for borrowers who received Pell grants as students, a program aimed at undergraduate students from the lowest income households. Pell Grant recipients are still subject to income thresholds.

“Only 16-17% of Americans have federal student loan debt, and yet your plan will require their debts to be redistributed and paid for by the vast majority of taxpayers,” the letter states.

According to the Education Data Initiative, 34% of adults aged 18-29 and 22% of adults aged 30-44 have 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 debt burden from the wealthiest Americans with a “regressive impact that hurts low-income families.”

“Put simply, your plan rewards the rich and punishes the poor,” the letter reads.

In Idaho, according to the Initiative, the median annual income of those with student loan debt is $60,999, while the average student debt is $33,100.

The governors wrote that many borrowers were working hard, making sacrifices, and paying off their debt, and that Americans who chose not to take out student loans should not have to pay the loans of others.

“A high-cost degree is not the key to unlocking the American dream — hard work and personal responsibility are,” the letter states.

A recent budget model from Penn Wharton found that a one-time loan forgiveness of $10,000 would primarily benefit borrowers in the lowest four income quintiles, ranging from $28,784 to $82,400.

They also point out that some economists, including Larry Summers, who served as director of the National Economic Council under former President Barack Obama, said the plan would make inflation worse. Other economists say the effect will be minor.

“Bipartisan opposition to your plan includes more than economic objections, but also process issues. As president, you do not have the authority to take unilateral action to usher in a sweeping plan to cancel student loans, a position shared by your party leaders,” the letter reads, citing a quote from the House Speaker Nancy Pelosi, D-CA, saying only Congress has that power. “For these reasons and more, we ask that you withdraw your student loan plan immediately.”