Republicans are generally united against President Joe Biden’s plan for broad-based student loan forgiveness, including U.S. Sen. Marco Rubio.
Biden is expected to announce forgiveness of $10,000 in federal student loan debt for all borrowers making under $125,000 per person, with the forgiveness amount doubled for Pell Grant recipients.
An extension of the repayment pause is expected through Dec. 31, which is alleged to be the final extension of the grace period, first approved by President Donald Trump in the early days of the COVID-19 pandemic.
In a statement Tuesday, Rubio railed against the proposal as failing fundamental tests of fairness, while not offering substantial reform that would benefit borrowers.
“Forgiving student loan debt isn’t free. It means the 85% of Americans with no undergraduate debt from college will be carrying the burden for those that do. That is not a relief, it is an unfair burden to place on working families,” Rubio contended.
“There are better ways to help borrowers with surging interest rates and staggering debt. My LOAN Act would increase transparency and eliminate interest rates in the federal student loan industry. Congress should pass it immediately,” Rubio urged.
The LOAN Act (short for Leveraging Opportunities for Americans Now) is not a new proposal: Rubio re-introduced it in 2021. As written, it proposes a removal of interest from loans, with financing fees ranging from 20% to 35% of the loan. Those who pay early would be eligible for refunds of part of the finance fee.
“My bill would reform our federal student loan system so that borrowers don’t get stuck with debt they can never repay. Instead of accruing interest, borrowers will pay a one-time fee paid out over the life of the loan and will be automatically placed in an income-based repayment plan,” Rubio said.
“It’s time to update our federal student loan system, because fear of debt should never stand in the way of an education and the pursuit of a better life,” Rubio said last August upon filing his bill, which does not appear on track to be passed this Congress.
Biden is framing the impending announcement as an example of a campaign pledge fulfilled.
“In keeping with my campaign promise, my Administration is announcing a plan to give working and middle class families breathing room as they prepare to resume federal student loan payments in January 2023,” Biden tweeted.