Republican senators, led by Sens. Bill Cassidy of Louisiana and John Thune of South Dakota, introduced a Congressional Review Act resolution this week to overturn the Biden administration’s recently unveiled student loan repayment plan, SAVE.
On Tuesday, Cassidy, the ranking GOP member on the Senate Health, Education, Labor, and Pensions Committee, voiced his reservations in an official committee statement. He contended that the plan, known as Saving on a Valuable Education (SAVE), would incur significant expenses, be unjust to borrowers, potentially reduce student loan repayments, and encourage students to take on additional debt, according to Inside Higher Ed.
“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,” he stated.
Rep. Lisa McClain, R-Mich., and Rep. Virginia Foxx R-N.C., both sponsors of the house resolution, issued a joint statement emphasizing the need to address the issues within the federal student loan system directly, stating that it should be handled with substantive solutions rather than relying on what they referred to as “gimmicks and false promises.”
“The only difference between President Biden and a snake oil salesman is a title,” the joint statement said.
“Biden’s administration knows what it’s doing is illegal, but it’s pushing forward anyway, promoting its SAVE scheme as a solution to America’s broken student loan system. In reality, the SAVE scheme is a desperate effort to curry favor and buy votes ahead of the next election.”
The SAVE plan can potentially decrease borrowers’ monthly payments.
“The SAVE plan is very generous to borrowers, almost like a grant after the fact,” said higher education expert Mark Kantrowitz, according to CNBC.
Under the plan, borrowers will see a reduction from the previous 10% of their discretionary income required by the Revised Pay As You Earn Repayment Plan (REPAYE) for undergraduate student debt to just 5% of their discretionary income. This change will take effect in July, 2024, once the SAVE plan is fully implemented.
For borrowers holding both undergraduate and graduate loans, their payment calculations will involve a weighted average ranging from 5% to 10% of their income, depending on their original principal balances.
On Tuesday, the U.S. Department of Education revealed that over 4 million individuals have registered for the program.
Consumer advocates have expressed disapproval of Republican initiatives to reduce aid.
“We condemn this move to block a plan that will provide significant financial relief to low-income borrowers and communities of color,” said Jaylon Herbin, director of federal campaigns at the Center for Responsible Lending, as reported by CNBC.
The Congressional Review Act enables Congress to obstruct new regulations through a joint resolution passed by the House and Senate. Nevertheless, the president retains the authority to veto such a resolution.
Consequently, “this attempt to block the SAVE plan will not be successful,” said Kantrowitz.
Jim Thomas ✉
Jim Thomas is a writer based in Indiana. He holds a bachelor’s degree in Political Science, a law degree from U.I.C. Law School, and has practiced law for more than 20 years.
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