Republicans' Student Loan Debt Plan: How It Could Work

As the Supreme Court is poised to rule on President Joe Biden’s loan forgiveness proposal, Senate Republicans have presented their strategy to handle the nation’s student debt crisis.

Sen. Bill Cassidy, R-La., and four other Republicans filed the legislation on Wednesday. The GOP package, dubbed the Lowering Education Expenses and Debt Act, comprises five bills intended to address the problems that are “skyrocketing” higher education expenses.

Over $1.6 trillion in loans have been taken out by over 45 million Americans who have federal student debt. You can check the tweet below:-

The Lowering Education Costs and Debt Act, introduced on Wednesday by a group of Senate Republicans, would require colleges to provide clearer information about their costs. https://t.co/o8EFO9Qoem

— CBS Evening News (@CBSEveningNews) June 15, 2023

According to the Committee for a Responsible Federal Budget, even if the Supreme Court upholds Biden’s plan to cancel student loans, the outstanding debt will return to its present levels in five years.

The cancellation of student loans “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 news conference on Wednesday.

“That’s why we introduced the Lowering Education Costs and Debt Act this morning… and unlike President Biden’s plan, this actually addresses the root causes of the student debt crisis.”

Cassidy introduced the bill alongside Republican Senators Chuck Grassley of Iowa, John Cornyn of Texas, Tommy Tuberville of Alabama, and Tim Scott of South Carolina.

What’s In The Republican Student Debt Legislation?

The first bill, the College Transparency Act, would restructure the college data reporting system to improve access to data on university outcomes, including graduation rates and debt after graduation.

Cassidy pointed out on Wednesday that Americans never purchase a car or a home without evaluating the cost, quality, and available financing alternatives. He recommended that comparable resources for higher education be easily accessible.

The Understanding, the True Cost of College Act, the second piece of legislation, would mandate that schools and universities utilize standard financial aid letters that make it plain what it would cost to attend the institution.

According to Grassley, who first proposed the legislation in 2019, consistent letters would make it simpler for prospective students to compare offers from various schools.

The third bill, known as the Informed Student Borrowing Act, according to Daines, who introduced it on Wednesday, would require prospective students to be given 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 preferred school and program.

Every year, students would have to participate in entrance counseling or acknowledge receiving counseling materials.

The Department of Education currently offers nine different student loan repayment options.

If you are interested to know more about this news, then see this tweeter post that CBS Evening News shares:

The Lowering Education Costs and Debt Act, introduced on Wednesday by a group of Senate Republicans, would require colleges to provide clearer information about their costs. https://t.co/o8EFO9Qoem

— CBS Evening News (@CBSEveningNews) June 15, 2023

The fourth bill, the Streamlining Accountability and Value in Education (SAVE) for Students Act, introduced by Senator John Cornyn, would eliminate all but two of those options: the standard 10-year repayment plan and the REPAYE program, which enables low-income borrowers with small loan balances to get loan forgiveness sooner.

Additionally, the plan would restrict loans for undergraduate programs where graduates can earn as much as a high school graduate or graduate programs where graduates may only make as much as a recipient of a bachelor’s degree.

Liberal arts educations, which have been linked to lower incomes after graduation, are said to be unaffected by the legislation, according to Cornyn.

Graduate PLUS loans, with higher borrowing caps than undergraduate loans, would be eliminated under the fifth bill, the Graduate Opportunity and Affordable Loans.

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They are restricted to the school’s attendance cost, less any additional financial aid the student may have received.

The bill’s author, Tuberville, referred to the loans as “inflationary” and said they were to blame for the rising tuition price.

Fate Of Student Debt Relief With Supreme Court

For millions of borrowers, Biden promised in August 2022 that he would eliminate at least $10,000 in student loan debt and $20,000 for Pell Grant recipients. The scheme was swiftly faced with some legal challenges, including two that reached the Supreme Court.

This month, a decision on Biden’s proposal is anticipated. However, interest would start accruing once more on September 1, and borrowers can expect to restart making loan payments in October if the Supreme Court does not rule on Biden’s proposal before June 30.

As part of the debt ceiling agreement with Republicans, the Biden administration vowed not to extend the “final” moratorium on repayments.

Tyler Marx

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Republicans’ Student Loan Debt Plan: How It Could Work

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