EXCLUSIVE— Rep. Byron Donalds (R-FL) said President Joe Biden‘s announcement on Friday that the administration would eliminate the student loan debt of more borrowers is unconstitutional.
More than 804,000 student loan borrowers will have their debt cleared in the coming weeks, eliminating more than $39 billion worth of payments due to a fix to income-driven repayment plans. The move comes roughly two weeks after the Supreme Court shot down Biden’s program.
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“You can’t have an executive that just decides — because of politics — ‘Well, I’m just going to do this,’” Donalds told the Washington Examiner. “What Joe Biden is doing is dictatorial. It’s unconstitutional, and it should not be tolerated.
“Joe Biden is playing ‘catch me if you can’ with our political system and the courts,” Donalds added.
The congressman also shared his thoughts on how student loan forgiveness will impact the economy, saying there is “no incentive” for borrowers to fulfill their fiduciary duty.
“When you start just forgiving debt, it’s a backdoor stimulus. No. 2, it hurts new loans to be issued in the future,” said Donalds. “If it’s now being understood that you don’t have to re-pay debt, then why would people take any care with what they borrow? This creates a serious moral hazard in our economy.”
The relief will come via adjustments to the income-driven repayment plans by the Department of Education. The Biden administration now says it will count payments for borrowers who made partial or late payments, or deferred payments.
The income-driven repayment plans allow borrowers to have their remaining debt forgiven after they have made payments for 240 or 300 months, depending on the plan.
The Department of Education says eligible recipients will receive a notification in the coming days. They also said borrowers who reach the threshold for student loan forgiveness will be identified and notified every two months until 2024 when the agency says all payment counts for borrowers will be updated.
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Shortly after the announcement, Vice President Kamala Harris said she and President Joe Biden are “committed” to student loan debt relief, while also touting her own record on the matter.
“President Joe Biden and I are committed to delivering relief to student loan debt borrowers to help them move forward with their lives — whether they want to start a family, buy a home, or become an entrepreneur,” Harris said. “Today, we are taking another historic step by forgiving $39 billion in student loan debt for 804,000 borrowers who have been paying down their debts for 20 years or more and should qualify for relief. Instead, many were placed into forbearance by loan servicers in violation of the rules, and others did not get appropriate credit for their monthly payments.”
