Washington, D.C. — The only Democrat in Iowa’s congressional delegation says the plan President Biden announced this past week to forgive student loan debt is just a temporary solution that doesn’t address the core problem, the soaring cost of higher education. Congresswoman Cindy Axne, of West Des Moines, says the debt cancellation plan is a good start, but more work needs to be done.
Axne says students need to understand their obligations to repay student loan, as well as postsecondary alternatives to four-year institutions, like trade schools and apprenticeship programs. At the same time, she says the high costs of college education must also be addressed.
Axne disputes comments from Republicans who say Biden’s plan will increase inflation and taxes. She points to a Goldman-Sachs analysis released Thursday indicating student loan forgiveness will have a modest impact on the national debt, but slightly lower inflation. She says that’s important.
Axne cites a U.S. Education Department announcement of an income-driver repayment plan, capping monthly student loan repayments at 5% of income. She says the plan ensures that borrowers’ loan balances won’t grow as long as they’re making payments. Under the president’s plan, the Department of Education will provide up to $20,000 in debt cancellation to Pell Grant recipients with loans held by the federal government, and up to $10,000 in debt cancellation to non-Pell Grant recipients. Borrowers are eligible for this relief if their individual income is less than $125,000, or $250,000 for married couples. The White House says no high-income individual or high-income household — in the top 5% of incomes — will benefit from this action. In addition, the plan also extends the pause on federal student loan repayments one final time through December 31st.
