The White House announced on Tuesday that approximately 4 million student loan borrowers have enrolled in the Biden administration’s new repayment plan since its launch last month. However, the initiative is now facing resistance from Republicans.
The income-driven repayment plan, known as “SAVE,” was established by the Education Department after the Supreme Court struck down the administration’s student debt cancellation plan. It aims to provide financial relief to millions of borrowers in the wake of the COVID-19 pandemic. In addition to the 4 million enrollments, another million borrowers have applied for the repayment plan since July 30.
Under this plan, borrowers who earn less than about $15 an hour are not required to make any payments. It is estimated that borrowers earning above that amount would save more than $1,000 annually compared to other repayment plans. Furthermore, this new plan ensures that borrowers’ balances do not grow due to unpaid interest as long as they keep up with their payments. Most balances are also forgiven after 10 years of consistent payments.
Undersecretary of Education James Kvaal expressed his satisfaction with the response to this new plan, highlighting its recent launch and the positive feedback received. However, on the same day the White House released enrollment figures, Republicans in both the House and Senate announced their plan to block the initiative by introducing a Congressional Review Act resolution.
Republican lawmakers criticize the plan as “reckless” and “an election-year stunt.” They argue that the plan’s cost, which could range from $138 billion to over $500 billion over 10 years, depending on the number of borrowers enrolled, unfairly burdens those who choose not to attend college and thus do not incur student loan debt.
Senator Bill Cassidy, a Republican from Louisiana, stated, “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 has garnered support from at least 17 of his GOP colleagues and aims to reach a total of 30 to force a floor vote on the resolution. Representative Lisa McClain, a Republican from Michigan, introduced a companion measure in the House.
This is not the first time Republicans have used the Congressional Review Act to block President Biden’s efforts regarding student loan cancellation. In June, before the Supreme Court struck down the previous debt cancellation plan, the Senate cast a bipartisan vote in favor of a resolution that would have blocked it from becoming law. The resolution also aimed to restart monthly loan payments that had been paused since the start of the pandemic. This rejection marked a significant setback for the administration’s higher education policy.
Republicans plan to employ the same legislative vehicle to disrupt the administration’s newest repayment plan, hoping to gain support from Democratic moderates like Senator Joe Manchin of West Virginia. Although Congressional Review Act votes require a simple majority, President Biden would likely veto the measure, and Republicans would lack the two-thirds majority needed to override the veto.
Despite the growing opposition to the repayment plan and the Supreme Court’s dismantling of the broader debt cancellation plan, providing relief for borrowers has been one of the administration’s major achievements over the past three years. So far, the Biden administration has approved the forgiveness of over $117 billion in student loan debt for 3.4 million borrowers. This includes borrowers who were defrauded by their schools or experienced sudden closures, individuals with permanent disabilities, participants in public service repayment programs, and those on income-driven repayment plans whose debts were inaccurately serviced.