Senate Republicans on Wednesday unveiled their plan to address America’s student debt crisis as a Supreme Court decision on President Joe Biden’s forgiveness plan is expected any day.
The GOP package, called the Lowering Education Costs and Debt Act, is made up of five bills meant to target issues that are driving “skyrocketing” higher education costs, according to Sen. Bill Cassidy, R.-La., who introduced the legislation alongside four other Republicans.
Roughly 45 million Americans have federal student debt, amounting to more than $1.6 trillion in borrowed funds. Even if Biden’s student loan forgiveness plan is upheld by the Supreme Court, outstanding debt will return to its current levels in just five years, according to the Committee for a Responsible Federal Budget.
“(Student loan forgiveness) is not a fix; this is merely a Band-Aid, and the Band-Aid saddles taxpayers with a burden again in five years,” Cassidy said during a press conference Wednesday. “That’s why this morning we introduced the Lowering Education Costs and Debt Act…and unlike President Biden’s plan, this actually addresses the root causes of the student debt crisis.”
Republican Sens. Chuck Grassley of Iowa, John Cornyn of Texas, Tommy Tuberville of Alabama and Tim Scott of South Carolina joined Cassidy in introducing the legislation.
What’s in the Republican student debt legislation?
The first bill, dubbed the College Transparency Act, would reform the college data reporting system to make information about outcomes at universities − such graduation rates and debt after graduation − more accessible.
- Cassidy on Wednesday mused that Americans don’t buy cars or houses without comparing prices, quality and financial operations options. He suggested that similar resources for higher education should be readily available.
The second bill, titled the Understanding the True Cost of College Act, would require colleges and universities to use uniform financial aid letters that are clear on the costs associated with attending the institution.
- Grassley, who first introduced the bill in 2019, said Wednesday that uniform letters would make it easier for prospective students to compare offers across schools.
The third bill, called the Informed Student Borrowing Act, would require prospective students to be provided with additional information about their loans, including the duration of their loan, their expected monthly payment and how much money they’re likely to make after attending their school and program of choice, according to Daines, who introduced the bill Wednesday.
- Students would be required to acknowledge they received counseling material or participate in entrance counseling each year.
The fourth bill, the Streamlining Accountability and Value in Education (SAVE) for Students Act, introduced by Cornyn, would reduce the nine different student loan repayment options offered by the Department of Education to two options: the standard 10-year repayment plan and the REPAYE program, which allows low-income borrowers with low balances on their loans to receive forgiveness sooner.
The bill would also limit loans for undergraduate programs where former students can’t earn more than a high school graduate, or graduate programs where ex-students can’t earn more than a bachelor’s degree recipient. Cornyn argued that the legislation would not disadvantage liberal arts educations, which can correlate with lower income after graduation.
The fifth bill, the Graduate Opportunity and Affordable Loans (GOAL) Act, would end Graduate PLUS loans, which have no borrowing limit, in an effort to pressure graduate schools into lowering costs. Tuberville, who introduced the bill, called those loans “inflationary” and said they have contributed to the increased costs of college.
Fate of student debt relief with Supreme Court
In August 2022, Biden announced he would cancel at least $10,000 in student loan debt for millions of borrowers, as well as $20,000 to Pell Grant recipients. The plan was quickly met with several legal challenges, two of which landed before the Supreme Court.
A decision on Biden’s plan is expected this month. But if the Supreme Court doesn’t rule on Biden’s plan before June 30, interest will begin adding up again on Sept. 1, and borrowers can expect to resume payments on their loans in October. The Biden administration agreed it wouldn’t postpone the end of the “final” pause on repayments as part of the debt ceiling deal with Republicans.
Contributing: Medora Lee, USA TODAY