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.
Even if it fails, the lawsuit exposes the loyalties of the Republican Party, the senator said. “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.”
On Thursday, six Republican-led states filed a lawsuit in 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 swiftly denied by a federal judge after the Biden administration said that officials will simply add an option to opt out of forgiveness if one chooses to do so.
There has been much scrutiny from conservatives and corporate media over the debt cancellation plan’s cost and its effect on things like luring low-income people into the military, along with spurious concerns about its fairness and its potential effects on the economy and inflation. Nearly all of these arguments have been repeatedly debunked or rebuffed by student debt cancellation advocates over the past years, but Republicans insist on making them anyway.
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 trillion in lost tax revenue after the party slashed tax rates for corporations and the rich. 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 estimates to be about $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 debt as 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.
By fighting against student debt forgiveness, Republicans can also garner the favor of corporate lobbyists. Student loan servicers have spent millions on lobbying efforts over the past two years, pushing politicians to oppose the student loan payment pause and likely also arguing against cancellation. Servicers are contracted by the federal government to manage student loans, and are then allowed to collect a fee on the loans they administer.
This lobbying appears to pay off in spades for servicers, which make hundreds of millions of dollars in profits each year with student loans and other services.
Source / Read More: Warren: Student Debt Relief Lawsuit Shows GOP Prioritizes Profit Over People