Republican Sen. Bill Cassidy of Louisiana.
Tom Williams/CQ-Roll Call, Inc via Getty Images
GOP lawmakers introduced a bill to overturn Biden’s new SAVE income-driven repayment plan.
The lawmakers argued the new plan is an overreach of authority and will cost taxpayers.
Borrowers can now apply for the SAVE plan before bills become due next month.
Lawmakers are starting to trickle back to Washington after their recess, and some of them wasted no time launching an effort to block President Joe Biden’s latest relief plan for student-loan borrowers.
On Tuesday, top Republican on the Senate education committee Bill Cassidy, Sen. John Thune, and Sen. John Cornyn led 14 of their GOP colleagues in introducing a bill that would overturn Biden’s new SAVE income-driven repayment plan, formally launched in August intended to lower borrowers’ monthly payments.
When the Education Department opened the application for its SAVE plan in August, it said that the new repayment plan would ensure any borrower making $15 an hour or under would not have to make any monthly payments. It also estimated that an additional 1 million low-income borrowers would experience that benefit, and the plan would save all other borrowers at $1,000 a year compared to other income-driven repayment plans.
However, the Republican lawmakers seeking to overturn that plan argued it’s an overreach of authority and would cost taxpayers.
“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.”
Cassidy and his colleagues are using the Congressional Review Act to attempt to overturn the SAVE plan, which is a fast track tool Congress can use to overturn final rules put in place by federal agencies. Cassidy used the same method to introduce a bill to overturn Biden’s broad debt relief plan before the Supreme Court ultimately struck it down — that bill passed Congress, and Biden vetoed it in June.
GOP Rep. Lisa McClain introduced a companion version of the senators’ bill in the House on Tuesday.
The introduction of this legislation comes just days after the student-loan industry turned back on. After over three years, interest on federal borrowers’ balances started to accrue again last week, and bills will become due next month. Along with the SAVE plan, the Education Department also announced 12-month “on-ramp” period to starting in October during which missed payments will not be reported to credit agencies, but since interest will still accrue during that time, the department recommended that borrowers who are able to make their payments do so.
The department also recently announced that 800,000 borrowers who made the required 20 or 25 years of required payments on income-driven repayment plans will have their loans wiped out, due to a one-time account adjustment for federal borrowers. While Republicans opposed that relief, as well, Biden is moving forward with implementing the new repayment plan as borrowers begin to face another monthly bill.
“This is real money President Biden is putting back into the pockets of working families,” Education Secretary Miguel Cardona said during a press call in August. “And when borrowers struggle to make ends meet, we’re not going to kick them while they’re down. SAVE is the first true student loan safety net in the country.”