By Maria Carrasco, NASFAA Staff Reporter
Rep. Bobby Scott (D-Va.), chairman of the House Committee on Education and Labor, and Rep. Rosa DeLauro (D-Conn.), chairwoman of the House Committee on Appropriations, spoke about President Joe Biden's student loan debt relief, other legislation aimed at student loan debt, and the future of higher education after Biden's relief is implemented at an event hosted by the Center of American Progress on Wednesday.
Both Scott and DeLauro praised Biden's debt relief plan, which would cancel $10,000 to $20,000 in student loan debt for eligible borrowers. However, Scott noted that Biden's plan does not cover incoming college students or borrowers that recently graduated. Scott spoke about how the Lowering Obstacles to Achievement Now (LOAN) Act, which he sponsored, would fill the gap for those borrowers.
The legislation, which was introduced in September, would double the federal Pell Grant by increasing the maximum award over a five-year period to $13,000 and would also alter the Public Service Loan Forgiveness (PSLF) program by shortening the time to forgiveness and codifying the limited PSLF waiver, which is set to expire on Oct. 31, 2022. The legislation would also lower interest rates by tying the rates for all new federal student loans to the 10-year Treasury note, but ensuring that no new loan will have an interest rate higher than 5%.
"If you significantly reduce the interest rate, your payments are going [toward] principal and not the interest and it allows you to refinance into programs where you can get the benefits of the LOAN Act," Scott said. "This would go a long way into making it more affordable for those with loans. … You can get a more generous Public Service Loan Forgiveness for those that already have loans. For those that are in school, looking forward, the loans will be easier to pay off, so college should be more affordable."
DeLauro also spoke about legislation she sponsored — the Affordable Loans for Any Student Act — that would simplify the repayment process by creating only two repayment options for loans entering repayment after July 1, 2022: one fixed, 10-year repayment plan, and one income-based repayment plan.
"Student loan repayment has become unmanageable," DeLauro said. "Borrowers are not receiving the benefits they're entitled to under the current system, which is why I introduced the Affordable Loans for Any Student Act and that is reform to that income-driven repayment program."
Scott was asked about the price tag for Biden's debt relief, which the Congressional Budget Office estimates would cost approximately $400 billion over 30 years. He responded, saying Biden's debt relief shows that going to college is also an expensive process and work needs to be done to get to a place where students can work their way through college again.
"There's no question that it's an expensive program," Scott said. "But the people didn't get into this situation by accident. It was because the states disinvested and the Pell Grant didn't cover as much as it should. So the people who are complaining are those that benefited from a different system."
When DeLauro and Scott were asked about the timeline for their legislation during the upcoming months, DeLauro said congressional Democrats were going to have their hands full with the appropriations process to pass an omnibus bill during the lame duck session.
"I think we have to leave that to the next Congress," DeLauro said of bills like the ones she and Scott have introduced. "But what we should do is to prioritize the areas that we believe we can move on and get agreement on as we move forward."
Asked whether Congress will need to appropriate money to the Department of Education (ED) to fund its implementation of Biden's debt relief, DeLauro said she tried to appropriate funds during the continuing resolution, which Biden signed earlier this month, but faced opposition from Republicans.
"What I tried to do in the continuing resolution was to provide funding for the Department of Education to help with the administrative costs and the overhaul of getting the relief quickly," DeLauro said. "And the Republicans said ‘no.' I tried over and over and over again, back and forth with offers keeping that in until we finally could not have a government shutdown."
DeLauro said during the lame duck session she and other congressional Democrats will move to get appropriations bills passed by December 16 — when the continuing resolution is set to expire — and not engage in reconciliation, which provides a "fast-track" process for consideration of bills to implement the policy choices embodied in the annual congressional budget resolution.
Publication Date: 10/13/2022
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