Sen. Romney introduces bill to prevent cancellation of student loans

May 18, 2022, 8:40 PM | Updated: May 19, 2022, 10:21 am

Sen. Mitt Romney...

Sen. Mitt Romney, R-Utah, will not run for reelection. (AP Photo/Alex Brandon, File)

(AP Photo/Alex Brandon, File)

WASHINGTON — Utah Sen. Mitt Romney was among several senators on Wednesday to introduce the Student Loan Accountability Act. It is legislation that will prevent the cancellation of student loans by President Biden.

“It makes no sense for the Biden Administration to cancel nearly $2 trillion in student loan debt,” Romney said in a press release. “This decision would not only be unfair to those who already repaid their loans or decided to pursue alternative education paths. But it would be wildly inflationary at a time of already historic inflation. Democrats and Republicans alike have called on the President to not take this unwise step and pile more onto our $30 trillion national debt. And while the President’s legal authority in forgiving this debt is dubious at best, our bill would ensure that he would be prevented from taking action.”

In 2020, Harvard Law School researched whether the president had the authority to eliminate student loans and reported their findings to Sen. Elizabeth Warren (D-MA). They concluded that the Secretary of Education (nominated by the president and approved by the Senate) has the authority “for broad or categorical student debt cancellation.”

While President Biden has not made an official announcement, multiple news agencies report that he would like to move forward with student loan forgiveness. The Hill reports Mr. Biden may be considering eliminating at least $10,000 of student loan debt per borrower. 

Some Democrats in Congress have called for $50,000 of debt elimination per borrower. However, that may not include higher-earning Americans according to The Washington Post.

How the Student Loan Accountability Act works

  • It will prevent the federal government from canceling or forgiving any outstanding balances on covered loans.
  • It will also include exemptions for existing federal student loan forgiveness, cancellation, or repayment programs that currently fall under the Higher Education Act.

According to Romney and his colleagues, the cancellation of student loans will have a real impact. 

Think tanks such as the Heritage Foundation, claim that eradicating student debt would give colleges and universities an incentive to raise college tuition.

Romney and the other senators also say that it worsens inequality. According to a Brookings Institute study, roughly one-third of all student loan debt is carried by the wealthiest 20 percent of the country’s population. While 8% of student loan debt is owed by the bottom 20 percent.

A study by the Urban Institute found that 12% of college debt in America is held by low-income households.

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Sen. Romney introduces bill to prevent cancellation of student loans