Julia Conley, Common Dreams
Just as the Biden administration announced this week that 4 million people have enrolled in its new income-driven repayment plan for student loan borrowers just two weeks after it was launched, Republican lawmakers in Congress announced plans to rip the debt relief away from Americans—saddling them with a continued financial burden that has left many working people unable to purchase homes, provide for a family, and save money.
Led by Sens. Bill Cassidy (R-La.), John Thune (R-S.D.), and John Cornyn (R-Texas), 17 Republican senators said Tuesday that they would use the Congressional Review Act (CRA), a tool members of Congress can invoke to overturn final rules set by federal agencies, to repeal the Saving on a Valuable Education (SAVE) plan.
The plan bases student debt monthly payments on borrowers’ income and family size, allowing those who earn $15 per hour or less to avoid any monthly payment. An estimated 1 million people are expected to have no monthly payments under the plan and other borrowers are expected to save at least $1,000 per year compared with other income-driven repayment plans.
Education Secretary Miguel Cardona said Tuesday that Americans are submitting new applications for the SAVE plan each day “so that they, too, can take advantage of the most affordable student loan repayment plan in history.”
“This is real money President [Joe] Biden is putting back into the pockets of working families,” Cardona said last month when the program was launched. “And when borrowers struggle to make ends meet, we’re not going to kick them while they’re down.”
But Republicans including Reps. Virginia Foxx (R-N.C.) and Lisa McClain (R-Mich.), who have introduced a companion bill to Cassidy’s in the U.S. House, claim the program is “illegal” and will “leave mountains of debt at the feet of taxpayers while absolving millions of borrowers of their loans.”
Jaylon Herbin, director of federal campaigns at the Center for Responsible Lending, said Wednesday that lawmakers should “oppose the CRAs to repeal SAVE.”
“Senate Democrats will strongly oppose this Republican measure should it come to the floor for a vote, and we will stand with student loan borrowers as we continue to push for as much relief as possible.”
“We condemn this move to block a plan that will provide significant financial relief to low-income borrowers and communities of color,” said Herbin. “SAVE provides hope for borrowers as the administration continues to fight alongside advocacy groups to find other ways to achieve broad-based student loan relief. We continue to support President Biden in his quest to make our educational finance system fairer for all borrowers and oppose harmful legislation, such as these CRAs, that will set our already flawed student loan repayment system back to the pre-pandemic era.”
Debt relief campaigners and legal experts have said for years that the Biden administration is legally able to wipe out student debt—going much further than the SAVE plan does—using the Higher Education Act of 1965, which allows the education secretary “to enforce, pay, compromise, waive, or release any right, title, claim, lien, or demand” related to federal student loans.
Republicans including Cassidy previously tried to block Biden’s debt relief plan which would have canceled up to $20,000 in debt for some student loan borrowers, before the right-wing majority on the U.S. Supreme Court struck down the proposal.
The GOP announced its latest plan to stop borrowers from benefiting from the income-based repayment plan as the administration works on a broad relief plan under the Higher Education Act, and just days after interest on federal student loans began to accrue again following a pause that began during the coronavirus pandemic.
About half of student borrowers in a poll released by Life and My Finances said they would not be able to afford monthly payments when they resume next month.
While “Democrats work hard to find new ways to provide relief for borrowers in need,” said Senate Majority Leader Chuck Schumer (D-N.Y.), “Republicans, instead of working with us to find a fix to our broken student loan system, immediately shoot them down.”
“Republicans use the same old, tired excuse: that student loan relief only helps the few, the wealthy. That’s utter nonsense,” said Schumer. “President Biden’s SAVE plan will benefit the Americans who need it most: working and middle-class families, students of color, community college students, and borrowers working in public service.”
“Senate Democrats will strongly oppose this Republican measure should it come to the floor for a vote,” he added, “and we will stand with student loan borrowers as we continue to push for as much relief as possible.”