Hinson: PPP loan forgiveness and student debt cancellation not the same

Iowa Republican U.S. Rep. Ashley Hinson on Friday criticized the White House for a thread on Twitter that’s gone viral highlighting Republican lawmakers for criticizing student loan forgiveness after having much larger amounts of Paycheck Protection Program loans forgiven.

Hinson, of Marion, called it a disingenuous comparison to President Joe Biden's student loan plan.

“The PPP program, with its flaws, was intended to help keep people employed during a national crisis — a completely different intent behind the program and behind what that forgiveness was designed to do,” Hinson said Friday during her weekly conference call with Iowa reporters.

Hundreds of billions of dollars in PPP loans were given out earlier in the COVID pandemic to help businesses and other organizations keep their workforce employed and cover important overhead. The program ended on May 31, 2021, and has allowed borrowers to have their loans forgiven depending on employee and compensation levels and how the loan money was spent.

A study by economists at the Federal Reserve Bank of St. Louis found about $800 billion in PPP loans were distributed, “saving” about 3 million jobs at its peak in the second quarter of 2020. The study, though, found the program was poorly targeted. Almost three-quarters of its benefits went to unintended recipients, including business owners, creditors and suppliers, rather than to workers, and benefited high-income households much more.

The authors concluded that the PPP cost taxpayers roughly $4 for every $1 of wages and benefits received by workers in “saved” jobs, and only about one-quarter of PPP funds supported jobs that otherwise would have disappeared.

Hinson contends unlike President Joe Biden’s executive action forgiving student loan debt, PPP was approved by Congress as a temporary, bipartisan program.

PPP loans were conceived as forgivable from the outset, conditioned on keeping workers on the payroll at time of national crisis. Federal student loans were offered on very different terms with the intention they be repaid, she said.

Hinson’s Democratic opponent in the November election, state Sen. Liz Mathis of Hiawatha, found fault with the student loan forgiveness.

“I have worked in the state Senate to bring down the cost of college and increase access to skills training for the good paying jobs we need to fill here in Iowa; we need a policy at the federal level that does the same,” Mathis said in a statement. “The Biden Administration’s student loan forgiveness plan falls short of addressing the root problems of college affordability.”

Iowa Democratic U.S. Senate candidate Mike Franken — who is challenging Sen. Chuck Grassley in November — echoed Mathis in a post on Twitter.

“The Administration's college debt forgiveness plan does not ‘fix’ the problems associated the cost of higher education,” he wrote. “A far more comprehensive approach is needed.”

Candidate spouses

The spouses of Hinson and Mathis both worked for companies that benefited from PPP loans.

Hinson’s husband, Matthew Arenholz, was a co-owner of Transportation Insurance and Consultants of Waterloo, which received a PPP loan of $142,029 in April 2020 — before Hinson was elected to Congress — for payroll. It had $143,043 forgiven, including accrued interest. The firm does business as Elliott Hartman Insurance Services.

Arenholz is identified as a partner in the agency on its website; Hinson’s office said her husband is no longer a part owner.

Amperage, a Cedar Falls marketing and fundraising firm tied to Democratic challenger Mathis’ husband, Mark, also received a $669,400 PPP loan in April 2020 for payroll, utilities and mortgage interest payments, and had $676,354 forgiven, including accrued interest.

The firm, which has offices in Cedar Falls, Cedar Rapids and Wisconsin, also received a $669,425 loan for payroll in February 2021 and had $672,530 forgiven.

Mark Mathis was co-owner and co-founder of ME&V, which was rebranded as Amperage in 2015, according to the company’s website. He’s listed as a special projects consultant on the company’s website.

‘Push back’

Hinson, on Friday, said she is “looking at every option to push back against” Biden’s plan, which estimates show could cost between $400 billion to $600 billion.

Supporters argue forgiving student debt would free up younger generations to invest in their financial future, provide a moderate boost to the economy and narrow the racial wealth gap, as Black students are more likely to borrow federal student loans and at higher amounts than others.

Hinson contends Biden’s plan will shift the cost to taxpayers who did not attend college and to those who worked to pay off their loans in full.

Despite announced income caps, Hinson too argued Biden’s student debt forgiveness plan will disproportionately benefit higher-income Americans, fuel inflation and encourage colleges to increase tuition and students to take out loans they can’t afford to pay back, “instead of incentivizing trade schools and apprenticeship programs that allow our students to graduate without debt and with the skills they need to go into well-paying career opportunities.”

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