In a closed-door meeting at the White House, President Joe Biden told Congressional Democrats he’s considering student loan forgiveness on a large scale. This is after Biden paused student loan payments yet again through August 31 of this year. U.S. Representative Rodney Davis says that “canceling” student debt is wrong and the President should pursue solutions already in law, like Davis’ Employer Participation in Repayment Act. Davis is also supporting legislation to prohibit the Biden Administration from continuing their widespread student loan forbearance for more than thirty days at a time.
“’Canceling’ student debt is morally wrong,” said Rep. Rodney Davis. “The debt isn’t just magically eliminated with the stroke of a pen. It means working- and middle-class taxpayers are on the hook for something that benefits overwhelmingly-wealthy, highly-educated elites. Those who never took out student loans or paid their loan off shouldn’t be footing the bill for everyone else. President Biden should stop catering to the Radical Left, and instead pursue responsible solutions that are fair to taxpayers and already in law, like my Employer Participation in Repayment Act, which allows employers to pay up to $5,250/year of their employee’s student debt, tax-free.”
Rep. Davis is supporting H.R. 7058, the Federal Student Loan Integrity Act, which would prohibit the Biden administration or any future administration from carrying out widespread student loan forbearance and other waivers of interest or significant loan changes for more than thirty days at a time. You can find the legislative text here.
This approach recognizes that there may be times of national emergency where fast temporary relief may be warranted but limits the ability of the executive branch to unilaterally institute long-term student loan forbearance through executive fiat. Such unchecked power is a recipe for fiscal disaster and does nothing to put borrowers on the right track to repaying their student loans at the detriment of taxpayers. Thanks to Rep. Davis’ Employer Participation in Repayment Act, employers can now offer tax-free student loan repayment benefits to their employees, up to $5,250 per year, through 2025. This program works identical to what is already permitted for tuition assistance benefits under Section 127 of the Internal Revenue Code.