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Ricketts criticizes Biden student loan forgiveness program

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Gov. Pete Ricketts of Nebraska joined 21 other Republican governors Monday in a letter bashing President Joe Biden's plan for college loan forgiveness.

In the letter, the governors called the plan a costly and unfair scheme to shift responsibility from students onto American taxpayers. They argued that people who paid their way through college or did not attend college should not have to pay for others who owe on student loans. 

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"Only 16-17 percent of Americans have federal student loan debt, and yet, your plan will require their debts be redistributed and paid by the vast majority of taxpayers," the governors said, adding: "Simply put, your plan rewards the rich and punishes the poor."

The governors estimated the plan would cost taxpayers more than $2,000 each, or $600 billion total, while driving up already "sky-high inflation" and incentivizing colleges to charge higher tuition.

Republicans generally have criticized Biden's late August announcement that he was taking action to cancel student loan debt for millions of borrowers. The plan would cancel up to $20,000 in student loan debt for Pell Grant recipients and $10,000 for other borrowers.

The Biden administration estimated the move would reduce loan repayments collected by the government by an average of $24 billion annually for 10 years, making the cost over that period about $240 billion. Others have put the cost much higher.

The Penn Wharton Budget Model pegged the cost of loan forgiveness between $469 billion and $519 billion over 10 years, depending on whether existing and new students are included. The model estimated that about 75% of the benefit would go to households making $88,000 or less per year.

In announcing the plan, Biden argued that skyrocketing cumulative federal student loan debt — $1.6 trillion and rising for more than 45 million borrowers — is a significant burden on America’s middle class.

He said the cost of college has nearly tripled since 1980 and federal student aid has not kept up, leaving many students with little choice but to take out loans. The resulting debts hamper many Americans' chances of buying a house, starting a business or saving for retirement. 

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