Dive Brief:
- A group of congressional Republicans is trying to roll back the Biden administration’s new income-driven plan for repaying student loans.
- GOP lawmakers in both chambers on Tuesday introduced a legislative resolution against the program under the Congressional Review Act, which allows Congress to rescind recently finalized executive actions. The resolutions were introduced by Michigan Rep. Lisa McClain and Louisiana Sen. Bill Cassidy, ranking member of the Senate Health, Education, Labor and Pensions committee.
- While the campaign against the income-driven plan is unlikely to gain traction in the Democrat-controlled Senate, it forces lawmakers to publicly take a position on student loan issues amid a heated debate about college affordability.
Dive Insight:
The Biden administration went through the typical regulatory process to create its new income driven repayment plan, known as SAVE.
It stops accrual of unpaid interest and lowers many borrowers’ monthly payments. The previous plans charged borrowers 10% of the income that the Education Department considers discretionary — now it’s 5%. The new rate only applies to undergraduate loans.
Changes have also resulted in a new contingent of borrowers not having to pay back anything monthly.
The plan attracted condemnations from Republicans who deemed it financially reckless. It’s the same line of criticism they have used against the White House’s other higher ed financial aid policies, including the mass loan cancellation program that the U.S. Supreme Court ruled unlawful this summer.
“Once again, Biden’s newest student loan scheme only shifts the burden from those who chose to take out loans to those who decided not to go to college, paid their way, or already responsibly paid off their loans,” Cassidy said in a statement.
The Biden administration said Tuesday that more than 4 million borrowers had enrolled in the income-driven plan, including those who transferred from the previous iteration of the program.
