GOP Introduces Resolution to End New SAVE Student Loan Repayment Plan
By Maria Carrasco, NASFAA Staff Reporter
Congressional Republicans on Tuesday introduced companion Congressional Review Act (CRA) resolutions to overturn the Biden administration’s new income-driven repayment plan, the Saving on Valuable Education (SAVE) plan.
Sen. Bill Cassidy (R-La.), ranking member of the Senate Committee on Health, Education, Labor, and Pensions (HELP), along with 14 other Senate Republicans, introduced the CRA resolution. CRA resolutions have previously been utilized by Congress to overturn agency rules and only requires a simple majority in each chamber to pass.
Cassidy and his colleagues in a press release called the SAVE plan “reckless” and said the plan will result in a majority of borrowers to not have to pay back “even the principal on their loans.” Additionally, the Senate Republicans argue that the SAVE plan could cost taxpayers as much as $559 billion and will encourage borrowers to take on student loan debt, among other issues.
“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. “Our resolution protects the 87 percent of Americans who don’t have student debt and will be forced to shoulder the burden of the President’s irresponsible and unfair policy.”
Rep. Lisa McClain (R-Mich.) and Rep. Virginia Foxx (R-N.C.), chair of the House Committee on Education and the Workforce, introduced the companion CRA resolution in the House on Tuesday. In a press release, the lawmakers said the SAVE plan will leave “mountains of debt at the feet of taxpayers while absolving millions of borrowers of their loans.”
“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,” the lawmakers said in a joint statement. “In reality, the SAVE scheme is a desperate effort to curry favor and buy votes ahead of the next election.”
Congressional Republicans previously introduced companion CRA resolutions to overturn President Joe Biden’s student loan forgiveness plan — before it was struck down by the U.S. Supreme Court — which would have forgiven up to $20,000 in student loan debt to eligible borrowers. However, President Joe Biden vetoed the resolution and the House failed to override Biden’s veto.
In July, the Department of Education (ED) released its final rules on the SAVE repayment plan, which is a rebranding and overhaul of the existing REPAYE plan. While the plan goes fully into effect on July 1, 2024, parts of it are being implemented early, including higher income protection, elimination of negative amortization, and exclusion of spousal income, among other things.
The Biden administration in late August announced the official launch of the SAVE plan application. And on Tuesday, ED announced that over 4 million borrowers were currently enrolled in the SAVE plan, including those that transitioned from the REPAYE plan.
"Millions of borrowers are already benefiting from enrollment in the SAVE plan, and I'm thrilled to see so many Americans submitting applications every day so that they, too, can take advantage of the most affordable student loan repayment plan in history," Education Secretary Miguel Cardona said in a statement.
Publication Date: 9/6/2023
Yolanda T | 9/9/2023 10:47:00 AM
I am always amazed how the GOP wants to stop block and criticize any program that will help student loan borrowers which most students in school are. A federal loan and federal plus loans are the only option for most graduate students. I don’t see anywhere in the article where this group has any viable alternative or plan. Please don’t be fooled by these Congressmen who claim to have your best interest.
Mary Bass S | 9/7/2023 4:25:13 PM
Have you ever worked in a Financial Aid Office in Higher Education? If you did, then you would truly have an idea of how many students utilize student loans to get through school. It is fantastic when students are able to get full scholarships or their parents have jobs that can cover the cost of their tuition, but that is not the case for many students; especially those whose household income does not exceed $55,000. Families are struggling on multiple levels (housing - rent or mortgage, grocery bills, transportation cost- car note and insurance, plus utilities) and when you add student loan debt onto this, it is overwhelming. I hope the GOP is considering data on multiple levels from various institutions when they make decisions that will continue to burden countless home.
Allison S | 9/6/2023 2:59:07 PM
Why doesn't the GOP crack down on the for-profits whose students make up the vast majority of defaulted loan borrowers? The Obama administration put legislation into place to better regulate the for-profits, which the Trump administration then reversed.
Ben R | 9/6/2023 2:26:10 PM
Jobs where the earnings aren't sufficient to service the size of the loan e.g. $150,000 in loans for a job paying $50,000 and where the IDR loan subsidy is more than half of what the actual payment should be.
David S | 9/6/2023 2:16:54 PM
Ben; what are "jobs that heavily depend on loan subsidies?"
Ben R | 9/6/2023 1:59:41 PM
There’s an inherent conflict between the generosity of the IDR plans like SAVE and Gainful Employment. On the one hand GE says it’s not ok to borrow even small amounts if the program leaves you no better off than a HS graduate (a fair argument), while IDR says that ANY borrowed amount, no matter how large is not only affordable, but perfectly acceptable and no level of subsidy is too high. Borrowing $10,000 is unacceptable if your wages are below a HS graduate for a job certificate, but if you borrow more than $150,000 for multiple post baccalaureate programs which lead to jobs that heavily depend on loan subsidies that are as much as 100 percent of the loan taken (including counting Non-payments as payments) and eventual cancellation, that’s perfectly fine.
David S | 9/6/2023 11:27:40 AM
Again, make no mistake; “Our resolution protects the 87 percent of Americans who don’t have student debt and will be forced to shoulder the burden of the President’s irresponsible and unfair policy" is an argument not just against the SAVE plan, but publicly funded financial aid in general. There is no center to seek out between the two parties; one is trying to help students, the other, in the name of wanting nothing popular to happen that President Biden can be given credit for, will go to every possible length to stop all of it.
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