Senators called the new IDR plan a “student loan scheme” that would ultimately cost taxpayers billions.
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- The Saving on a Valuable Education (SAVE) plan would slash monthly payments for many federal student loan borrowers.
- Some core tenets of the plan took effect in July.
- Republicans are now hoping to block the final plan from going into effect.
- Some senators said it unfairly burdens taxpayers who never attended college or already paid off their loans.
Over a dozen Republicans in the U.S. Senate introduced a Congressional Review Act (CRA) resolution to block President Joe Biden’s new income-driven repayment (IDR) plan.
Sen. Bill Cassidy of Louisiana, ranking member of the Senate Health, Education, Labor and Pensions (HELP) Committee, introduced the resolution Tuesday. He called the new IDR plan, which promises to slash monthly payments for many federal student loan borrowers, unfair to non-borrowers or those who already paid off their student loans.
“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% of Americans who don’t have student debt and will be forced to shoulder the burden of the president’s irresponsible and unfair policy.”
Sixteen other Republicans introduced the CRA resolution alongside Cassidy.
This is likely a performative effort. Even if the resolution passes both the Senate and House of Representatives, Biden must sign it into law to become active. Congress can override the president’s veto, but conservative lawmakers likely would not be able to drum up enough opposition to the IDR plan to override the veto.
The resolution may, however, serve as a litmus test for moderate lawmakers on both sides of the aisle.
The Congressional Review Act allows Congress to overturn any regulatory changes made by the executive branch. Biden’s new IDR plan went through a lengthy negotiated rulemaking process that dates back to late 2021. His administration didn’t formally introduce the plan into the Federal Register until January 2023.
Some core tenets of the plan took effect July 30.
Those enrolled in the Saving on a Valuable Education (SAVE) plan won’t have to make any monthly payments on their loans if their annual income is less than 225% of the federal poverty guideline. Additionally, those on the SAVE plan won’t accrue interest each month they make a payment.
These changes will result in more borrowers not having to make monthly payments. Those that do, meanwhile, will have lower monthly payments than under most other IDR plans, and all borrowers on the SAVE plan are eligible for complete loan cancellation after 20 years of continual repayment.
The Department of Education announced that since July 30, nearly 1 million borrowers have applied to enroll in the SAVE plan.
Cassidy said these changes turn IDR into a “poorly targeted taxpayer-funded grant program.”
The Penn Wharton Budget Model estimates that the SAVE plan will cost approximately $475 billion over the next 10 years.
Here are the other Republican senators who joined Cassidy in filing the CRA resolution:
- John Thune, South Dakota
- John Cornyn, Texas
- John Barrasso, Wyoming
- Mike Braun, Indiana
- Mike Crapo, Idaho
- Steve Daines, Montana
- Joni Ernst, Iowa
- Chuck Grassley, Iowa
- Cindy Hyde-Smith, Mississippi
- Ron Johnson, Wisconsin
- James Lankford, Oklahoma
- Cynthia Lummis, Wyoming
- Roger Marshall, Kansas
- James Risch, Idaho
- Tim Scott, South Carolina
- Thom Tillis, North Carolina
Republican Rep. Lisa McClain of Michigan introduced a mirroring resolution in the U.S. House of Representatives on Tuesday.