Senate Minority Leader Mitch McConnell (R-Ky.) criticized President Biden’s decision to cancel $10,000 of student loan debt for borrowers making less than $125,000 annually, calling it a “wildly unfair redistribution” of wealth in favor of higher-earning Americans.
McConnell said in a statement on Twitter on Wednesday that the move is a “slap in the face” to those in the workforce who made sacrifices to pay off their debt, as well as those who made different career choices to avoid student debt.
He said the median American with student loans has a much higher income than the median American overall, and experts who have studied loan forgiveness have found that its benefit mostly goes to higher-earning individuals.
“President Biden’s inflation is crushing working families, and his answer is to give away even more government money to elites with higher salaries,” the GOP leader said. “Democrats are literally using working Americans’ money to try to buy themselves some enthusiasm from their political base.”
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The Brookings Institution reported in October 2020 that the 40 percent of households with the highest incomes, more than $74,000 per year, owe almost 60 percent of outstanding student loan debt. The 40 percent of households with the lowest incomes hold just less than 20 percent of that debt.
Biden’s plan will forgive up to $20,000 to Pell Grant recipients, those with the greatest financial need, and limit repayment of undergraduate loans to 5 percent of a borrower’s monthly income. The president also extended the pause on federal student loan repayment until Dec. 31, pushing back a deadline that was set to pass at the end of this month.
Senior administration officials have said the president’s action will largely help people who came from working class families and make up the working class now.
McConnell also said Biden’s decision will make inflation worse just weeks after congressional Democrats approved the Inflation Reduction Act, which Biden signed into law last week.
McConnell and other Republicans have been joined by former Treasury Secretary Larry Summers in arguing that student debt forgiveness will make inflation worse.