In the wake of the Friday Supreme Court ruling striking down the Biden administration’s student loan debt cancellation plan, members of the GOP are moving forward with their own proposed solution.
Conservative legislators from both chambers, who remain vocally opposed to the president’s landmark, claiming it is an overreach, celebrated the court’s decision.
Despite the 6-3 ruling against him, President Joe Biden laid out alternative options to his original call for sweeping debt forgiveness on Friday, although some specific details remain unclear.
“I’m announcing today a new path consistent with today’s ruling to provide student debt relief to as many borrowers as possible as quickly as possible,” said Biden. “We will ground this new approach in a different law than my original plan, the so-called Higher Education Act, that will allow [Education] Secretary [Miguel] Cardona…to compromise, waive or release loans under certain circumstances.”
According to the president, an on-ramp to repayment will begin later this fall. It is set to include a 12-month grace period after the pause is unfrozen in September.
According to the government, federal student loan borrowers should expect interest on their debts to begin again on September 1, with payments starting in October. Repayments had been paused for over three years amid disruptions from Covid-19.
Recently, House Education and the Workforce Committee Chairwoman Virginia Foxx of North Carolina and Louisiana Senator Bill Cassidy, ranking member of the Senate’s Health, Education, Labor, and Pensions (HELP) committee, requested to meet with Cardona on or before July 20 to discuss roadblocks to federal student aid servicers along with internal documents and memos about the department’s strategy for the return to repayment.
“The success of this return to repayment hinges on Secretary Cardona stepping up to the plate and giving borrowers and servicers clear guidance,” said Foxx in a statement. “Because the Secretary has yet to do that, we are demanding a briefing from him to explain the Department’s plans.”
Senate Republicans and Cassidy previously sent a letter to the secretary seeking to halt President Biden’s student debt relief plan in early June and called it an “affront to the millions of
Americans that do not have student loans.”
After passing the GOP-controlled House, the Senate also voted to end the federal pause on repayments and dismantle the plan under the Congressional Review Act (CRA). Republicans received bipartisan support from Senators Jon Tester from Montana and Joe Manchin from West Virginia, both Democrats, and Kyrsten Sinema, a former independent member of the Democrat party.
As was expected, the bill was vetoed by President Biden.
In February, led by GOP Senator Marsha Blackburn of Tennessee and Foxx, over 170 lawmakers filed two separate amicus briefs with the Supreme Court to oppose the president’s debt cancellation plan.
A spokesperson with the Education Department did not say whether Cardona would meet with the legislators; however, the spokesperson reiterated the administration’s continued focus on student loan debt.
According to the spokesperson, the department remains in contact with loan servicers and will directly contact borrowers once repayment resumes. “We are fully committed to helping borrowers successfully navigate the return to repayment with the pandemic now behind us.”
GOP offers student loan debt alternative
Members of Foxx’s committee introduced a bill called the Federal Assistance to Initiate Repayment (FAIR) Act, which would allow student loan borrowers access to burden-free and affordable repayment options.
Among several changes, the bill would require the secretary of education to make “at least 12 notifications” to borrowers before the repayment begins — including the deadline, options for repayment, and more.
The legislation would also create an income-driven repayment plan, automatically have borrowers repaying based on their income, and set repayment at 10% of borrowers’ discretionary income.
Half of a borrower’s payment would go toward the principal for those with adjusted gross income less than 300% of the federal poverty line — $45,675 for people under 65 with interest paused.
The FAIR Act would offer various forbearance and deferment options, including active-duty National Guard, military duty, and medical residency.
In a joint statement, Representatives Foxx, Lisa McClain, and Burgess Owens called their proposed legislation, H.R. 4144, a “fiscally responsible, targeted response.”
“This Republican solution takes important steps to fix the broken student loan system, provide borrowers with clear guidance on repayment, and protect taxpayers from the economic fallout caused by the administration’s… agenda,” reads the joint statement.
Advocates for student debt relief rebuked the proposed House bill.
“The FAIR ACT is anything but fair,” said student loan borrowers group We The 45 Million Executive Director Melissa Byrne told ABC News. “It’s disappointing that the House Republicans once again refuse to engage with student loan borrowers and advocates to work on solving the crisis of higher education costs.”
