By the Republican National Committee
STUDENT LOAN PAYMENTS RESUME
- Student loan borrowers must again pay off their student loans, but now they’re doing so from a much more difficult financial position because of Biden.
<ul>
<li>While Biden was pushing his student loan bailout – a “<a href=”https://www.nytimes.com/2018/11/18/opinion/student-debt-forgiveness-college-democrats.html”>giant welfare program for the bourgeoisie</a>” – he was also busy <a href=”https://gop.com/research/bidens-inflation-evasion-rsr/”>sending inflation soaring</a> and making nearly everything more expensive for everyday Americans.</li>
</ul>
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<li>Biden’s illegal student loan promises were shut down after the Supreme Court <a href=”https://gop.com/research/bidens-illegal-student-debt-bailout-struck-down/”>struck down</a> his bailout– even Nancy Pelosi <a href=”https://twitter.com/RNCResearch/status/1674790029544275968”>said</a> Biden “does not” have “the power for [student loan] debt forgiveness.</li>
<li>Biden <a href=”https://www.nytimes.com/2022/08/24/us/politics/student-loan-forgiveness-biden.html”>wanted to unilaterally cancel up to $10,000</a> of student debt per borrower, a handout to the rich that would have cost taxpayers billions, increased tuition, and worsened inflation.
<ul>
<li>According to the <a href=”https://budgetmodel.wharton.upenn.edu/issues/2022/8/26/biden-student-loan-forgiveness”>Penn Wharton Budget Model</a>, Biden’s student loan bailout “could [have] exceed[ed] $1 trillion,” with the majority of the benefits going to the top 60 percent of earners.</li>
<li>Biden’s plan would have done “<a href=”https://www.cnn.com/2022/03/27/politics/biden-student-loan-debt-17-billion/index.html”>little to help future college students, borrowers who have already paid off their loans and those who never went to college in the first place</a>.”</li>
<li>Experts warn that Biden’s plan would have <a href=”https://twitter.com/jasonfurman/status/1562503996270845953”>encouraged</a> colleges to raise tuition even higher, making the problem even worse.</li>
<li>By striking down Biden’s student debt bailout, the Court thwarted a <a href=”https://fortune.com/2023/02/28/student-loan-forgiveness-program-supreme-court-begins-details/”>dangerous precedent</a> that would have abused presidential power.</li>
</ul>
</li>
AS PAYMENTS RESUME BIDENOMICS IS WREAKING HAVOC ON BORROWERS’ BUDGETS
- Prices have risen by 17.4 percent since Biden took office – with Americans still reeling from the lasting effects of inflation.
<ul>
<li>On a year-over-year basis, inflation under Biden has <a href=”https://data.bls.gov/timeseries/CUUR0000SA0?output_view=pct_12mths”>averaged 6 percent</a> – more than double the level of inflation seen under any of the last four presidents.
<ul>
<li>Rent is up <a href=”https://fred.stlouisfed.org/series/CUUR0000SEHA”>15.9%</a>.</li>
<li>Electric bills are up <a href=”https://fred.stlouisfed.org/series/CUUR0000SEHF01”>24.6%</a>.</li>
<li>Grocery prices are up <a href=”https://beta.bls.gov/dataViewer/view/timeseries/SUUR0000SAF11”>19.3%</a>.</li>
</ul>
</li>
</ul>
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<li>In order to afford payments in this economic environment, many borrowers are likely to <a href=”https://www.nytimes.com/2023/09/15/business/economy/restart-student-loan-payments.html”>pull back</a> on their spending habits.
<ul>
<li><a href=”https://www.cnbc.com/2023/08/13/56-percent-of-student-loan-borrowers-will-have-to-choose-loans-or-necessities.html”>56 percent</a> of borrowers say they will have to choose between making their loan payments or covering necessities, like rent and groceries.</li>
<li>Economists expect this will cause a <a href=”https://www.nytimes.com/2023/09/15/business/economy/restart-student-loan-payments.html”>0.8-point decrease</a> in consumer spending growth in the fourth quarter.</li>
</ul>
</li>
<li>Other borrowers are <a href=”https://www.cnbc.com/select/student-loan-borrowers-sacrifice-savings-to-pay-off-college-debt/”>sacrificing their savings</a> in order to pay off student debt as the cost of living surges.</li>
<li>Borrowers who were in financial distress before the pandemic are <a href=”https://fivethirtyeight.com/features/how-restarting-student-loan-payments-could-change-millions-of-lives-and-the-economy/”>especially vulnerable</a> now, having <a href=”https://papers.ssrn.com/sol3/papers.cfm?abstract_id=4451747”>used the pause</a> to increase credit card debt and auto loan debt to afford necessities under Bidenomics.</li>
<li>Meanwhile, credit card debt is <a href=”https://www.nbcnews.com/business/consumer/credit-card-debt-rising-as-student-loan-payments-restart-rcna104442”>rising by billions of dollars</a>, already surpassing <a href=”https://www.cnn.com/2023/08/08/economy/us-household-credit-card-debt/index.html”>$1 trillion</a> – a new record.
<ul>
<li>More than <a href=”https://www.foxnews.com/us/college-students-struggle-us-credit-card-debt-hits-record-high”>four in ten college students</a> say they are trying to pay off some type of credit card debt.</li>
</ul>
</li>
BIDENOMICS HAS CAUSED INTEREST RATES TO SOAR, IMPACTING STUDENT LOANS
- Hardworking Americans who want to pay off their student loans, as well as those thinking about going to college, are getting pummeled by higher interest rates thanks to Biden.
- Borrowers of private student loans with variable rates have been directly impacted by the Fed’s decision to raise interest rates.
- Average interest rates on a 5-year variable-rate private student loan currently sit at 12.04 percent, up from a record low of 1.84 percent in 2021.
- While borrowers who already hold federal student loans are not affected by the Fed’s actions, new batches of federal loans will hold higher rates.
- Borrowers with federal undergraduate loans disbursed after July 1, 2023 will pay 5 percent – just three years ago, rates were below 3 percent.
- This is the highest level that most undergraduate borrowers have faced since 2013.
BIDEN’S STUDENT LOAN PAUSE COST TAXPAYERS BILLIONS
- Biden’s pause on student loan payments cost American taxpayers nearly $300 billion, with “most of these costs” accruing under the Biden administration.
<ul>
<li>The payments pause cost taxpayers <a href=”https://www.crfb.org/blogs/student-loan-pause-could-cost-275-billion”>$5 billion per month</a>.</li>
</ul>
</li>
<li>Higher-income earners benefited the most from the pause, despite the White House’s claim that <a href=”https://www.whitehouse.gov/briefing-room/statements-releases/2022/08/24/fact-sheet-president-biden-announces-student-loan-relief-for-borrowers-who-need-it-most/”>90 percent</a> of their planned relief would go to families with incomes less than $75,000.
<ul>
<li>Families with incomes greater than $75,000 enjoyed more than <a href=”https://www.educationnext.org/student-loan-payment-pause-benefits-high-income-households-most-borrowers-unprotected-from-risk/”>65 percent</a> of the relief from the paused payments.</li>
<li>The top 20 percent of households received nearly <a href=”https://www.educationnext.org/student-loan-payment-pause-benefits-high-income-households-most-borrowers-unprotected-from-risk/”>30 percent</a> of the benefit while only accounting for 16 percent of families with federal student debt.</li>
