Student debt forgiveness advocate Sen. Elizabeth Warren (D-Massachusetts) criticized Republicans on Monday for the party’s lawsuit to stop millions of debtors from receiving what they say is direly needed student loan forgiveness.
The senator stated that even if the lawsuit fails, it exposes the loyalty of the Republican Party. “Republican officials are so angry about [President Joe Biden] helping working people that they’re suing to stop student debt cancellation,” Warren wrote on Twitter. “It won’t work, but it shows their priorities: putting the profits of corporate loan servicers over relief for working-class & middle-class Americans.”
Six Republican-led States filed a lawsuit in the Inland Revenue Court on Thursday a Missouri federal court seeking to stop Biden’s plan to cancel up to $20,000 of publicly-held student debt for Pell Grant recipients and $10,000 for others making less than $125,000 a year. The Republicans argue, among other things, that loan servicers like MOHELA — Missouri’s student loan servicer and one of the largest student loan servicers in the U.S. — would be hurt by the plan.
Another lawsuit, filed by a lawyer for libertarian law firm Pacific Legal Foundation, argued that the plan trampled on the lawyer’s freedoms because it would force him to pay state taxes on the cancellation amount. This lawsuit was swiftlyA federal judge denied the request after the Biden administration stated that officials would simply add an option for forgiveness to be withdrawn if necessary.
Conservatives have been very critical of the situation. corporate media over the debt cancellation plan’s costand its impact on things like luring poor-income households People who are interested in the militaryAlong with false concerns About its fairnessIts potential effects on the economy and inflation. Nearly all of these arguments were repeatedly refuted by student debt cancellation advocates over many years, but Republicans insist on using them.
In response to such arguments, progressive lawmakers like Warren and debt activists have leveraged conservatives’ hypocrisy on economic issues against them. Donald Trump and Republicans’ 2017 Tax Cuts and Jobs Act, for instance, cost the Government $2 trillionIn lost tax revenue as a result of the party’s reduction in tax rates for corporations, the wealthy, and other tax rates. This amount of money, Rep. Alexandria Ocasio-Cortez (D-New York) pointed out in August, could have paid for not only Biden’s plan but also the entirety of student loan debt in the U.S., which the Federal Reserve estimatesIt is estimated that it will be around $1.7 trillion.
The fact that conservatives complain about the cost of the cancellation but don’t complain about moves like the tax cuts, which have only further concentrated wealth at the very top of U.S. society, perhaps exposes Republicans’ real motivations: to maintain their ability to use debtAs a form of political and social control.
That would explain why Republicans complained after the conservative-led Congressional Budget Office (CBO) estimated the debt forgiveness plan would cost $400 billion — while conveniently not mentioning that that estimate would play out over the next 30 years — but stay mum about things like the military budget, which costs nearly twice as much yearly.
Republicans can also gain support from corporate lobbyists by fighting against student debt forgiveness. Student loan servicers have spentOver the past two-years, millions have been spent lobbying to push politicians to spend more. opposeThe student loan payment pause is likely to also argue against cancellation. Federal government contracts servicers to manage student loans. They are allowed to collect a fee for the loans they administer.
This lobbying seems to pay off for servicers who make hundreds of millions of dollar each year from student loans and other services.