You Take Out A Loan, You Pay It Back’_ Tim Scott & Witness Shred Biden’s Student Debt ‘Debacle’

Senator Scott. Thank you, sir. Thank you all. The newly wedded Senator Scott. Yes, sir. Extending my time beyond the five minutes in order to respond to the statement about me being nearly married, I will say that this ring here weighs more than it appears to weigh. A weight of responsibility. It's a great sign, actually, because in fact, you take up the marriage process and ceremony, the wedding itself, and you come to the conclusion that it's a weight of responsibility. And I thank God Almighty that I've had the opportunity to engage in it at 58 years young. So it'll take me a little while to get to my 50th anniversary, but that's okay by me. I'll be 108 years old. Thank you so much, Senator. It's a simple concept. You take out a loan, you pay it back. I'm not sure where the confusion is on that. Frankly, I think the cost of higher education may be debatable, whether it's good or bad. But one thing is without question, the ROI on your college education is pretty darn strong in America. And frankly, the desire to see colleges move towards free, interesting concept. You look at states like Tennessee, where you can get your first two years of college free at their local college community schools, and those assets, those credit transfers to the four-year schools. In South Carolina, if you go to some of our local community colleges, those credit transfers to Clemson and North Carolina or to other public schools in the state, that's an easy way for states to do what I believe is a state and local responsibility. Manage the resources within their states, not put that onus on the backs of the federal government. Ms. Akers, thoughts? I tend to agree with you. The average net cost of enrollment at community college is negative based on the existing subsidies to higher education at this point. I think that, in fact, the ROI is, on average, very large and positive. So, in fact, people who get in and go through college and finish their degree are getting a fantastic deal. Not to say we shouldn't have safeguards for people who borrow and don't get that return, but on average, the system should work well if we were supporting it with policies that, in fact, were buying into the idea that we would have a lending program in place. The low delinquency rate for private loans, less than 4%, compared to over 12% for federal loans, demonstrates their effective role in managing financial risk. Do you agree with that statement? Yes. So, part of the problem with the federal student loan program is that, by design, there is no underwriting that takes place. What that means is that we have decided that we're going to make everyone eligible for the same amount of credit, regardless of their prospects of being able to pay in the future. The advantages that private student loans have is that, in fact, they don't make this decision. So, it's the underwriting that ensures that these loans are, in fact, affordable. We haven't done that. If there is a predatory lender in this space, I think there's an argument to be made that it's the federal government. Thank you. Another question for you, Ms. Akers. Wouldn't it make more sense for us to focus on comprehensive reforms, like improving financial aid transparency, scaling back federal lending programs, and promoting accountability among colleges to prevent runaway tuition costs? Absolutely. I feel like we are at a point today where we have dissolved the functioning of the program because of all of the incremental reform. We're overdue for a reauthorization of the Higher Education Act that should basically refine, simplify the program, put in place a single lending program, tough accountability standards on colleges, maybe even an expansion of the Pell Grant program, but basically reinvest in this idea that people are borrowing to be able to make investments in themselves that they can pay back to taxpayers in the future. One of the... I think it was 2010 when Congress passed legislation that capped a borrower on the public student loans at 10% of their income, based on that 10% cap, plus I think it was a 15-year, 20-year ultimate repayment window. The fact of the matter is that already in existence is a system where the average borrower will likely not pay back what they've borrowed. That unpaid balance doesn't just disappear like magic, it actually goes on the backs and the shoulders of other folks. In fact, I think it's a misnomer to talk about student loan forgiveness or student loan cancellation. In fact, we should be using the terminology that this is a transfer of debt to taxpayers who are now on the hook to pay for these unpaid balances. The way I look at it, and I've said this several times, that I'm the first college graduate in my family, and I thank God that I've had the opportunity to go to college and to graduate. Think about the whole student loan debacle brought to us by the Biden administration of recent, trying to cancel a trillion dollars worth of student loan debt. The one thing I keep asking myself, why is it okay for my mother, who never made more than $20 an hour, to be responsible to carry a part of the burden for people who make six figures annual salaries? I don't understand the fundamental unfairness of transferring to someone something they never signed for, transferring away from someone that they actually signed up for. I think that's absolutely the case, and probably my fellow witnesses here at the table would be quick to point out that not everybody who's gone to college is in fact in that position of financial privilege. But it's worth revisiting what you just put on the table, that in fact there were existing programs that ensured that anybody who had a student loan 10 years ago that was unaffordable to them did not have to repay it. So in fact, there was fairness in the previous system. I would argue and agree with you today that we are moving away from fairness. Thank you. Thank you, Senator.