(Radio Iowa) – The only Democrat in Iowa’s congressional delegation says the plan President Biden announced this 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.
“I don’t look at this as a long-term or permanent fix in any way, shape or form,” Axne says, “and if I would have done anything like this, I’d be looking at figuring out how we can make this a better opportunity across the board for everybody by lowering the cost of school, and fixing the student loan interest rate, in general.” Axne says students need to understand their obligations to repay student loan, as well as post-secondary 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.
“Here in Iowa even, we’re Topsy-turvey just like every other state,” she says. “Back in the day, the majority of the college costs at a regents institution–so, you know, our public schools–60% of it would have come from the state financing it, then about 40% from the students. That’s reversed now. So, not only has college gone up, but there’s also a reversal on who’s paying the bulk of it.”
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. “People come to my office all the time,” Axne says. “I hear from realtors that student loan debt is strapping people from buying new homes. When folks buy a property, not only does that help the economy–with, you know, paying for the house to be built and those workers to built it, but it’s all the stuff they buy to put in there–that creates jobs in America for appliances, and things. If they build a family, all this stuff. It helps build our economy.”
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.
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