College tuition increases consistently outpace inflation, with no end in sight. In fact, many economists believe that student aid is abused by colleges who, knowing the government will pay the tuition, raise the tuition significantly each year. The nation’s student loan debt balance has skyrocketed to almost $2 trillion, and lackluster student performance calls into serious question whether ballooning costs and indebtedness are worth the investment: only about half of college enrollees complete a degree within six years.
“For decades, universities have amassed billion-dollar endowments while teaching nonsense like men can get pregnant. All while charging extortionary tuition. Now Joe Biden wants to give away another $1 trillion to prop up the system. That’s wrong. Instead, it’s time to put universities on the hook and give students the information they need to make informed decisions,” Hawley, a Republican, told the Daily Caller.
Polls show that the Biden student debt bailout is extremely unpopular with individuals who pay taxes, including retirees. Polls also show it is unpopular with students who have not gone into debt to attend college and young adults who went into the trades.
The bill is titled Make the Universities Pay Act. The Legislation requires institutions of higher education participating in the Federal Direct Student Loan Program to pay 50% of any student loan balance that is in default.
Hawley’s Make the Universities Pay Act will:
- Going forward, require institutions of higher education participating in the Federal Direct Student Loan Program to pay 50 percent of any student loan balance that is in default.
- Institutions of higher education are prohibited from increasing the cost of attendance in order to offset this liability unless there is an equivalent percentage decrease in administrative expenses at the institution.
- Allow student loan debt to be discharged in bankruptcy.
- Undergraduate student loan debt can be discharged five years after the first payment is due, while graduate student loan can be discharged fifteen years after the first payment is due.
- Require each institution of higher education participating in federal financial aid programs to publish post-graduate outcomes, including mean and median earnings of graduates and student loan default rates, disaggregated by each degree or program of study.
The Biden administration is taking executive action to forgive $10,000 per borrower. The move would clear $321 billion of federal student loans and clear the student debt for almost 12 million people, according to CNBC.
Hawley is likely to get significant public support but few Democrats are expected to support it.
Biden will also cancel up to $20,000 for Pell Grant recipients.