HYDE-SMITH COSPONSORS BID TO OVERTURN BIDEN’S LATEST STUDENT LOAN SCHEME
Administration Again Exceeds its Authority to Shift Student Loan Burden to Taxpayers
WASHINGTON, D.C. – U.S. Senator Cindy Hyde-Smith (R-Miss.) today cosponsored a Congressional Review Act (CRA) resolution of disapproval to overturn President Biden’s latest student loan bailout scheme that will cost taxpayers billions so a majority of bachelor’s degree student loan borrowers will not have to repay even the principal on their loans.
U.S. Senator Bill Cassidy, M.D. (R-La.), ranking member of the Senate Health, Education, Labor and Pensions (HELP) Committee, introduced S.J.Res.43 as a challenge to the income-driven repayment (IDR) rule unveiled after the U.S. Supreme Court struck down an earlier Biden plan as unconstitutional.
“I believe most Americans would be shocked to learn that under this rule most students would no longer be required to pay off their student loans. This is an audacious policy shift that leaves taxpayers holding the bag for most post-secondary borrowing,” Hyde-Smith said. “The President is again overstepping his authority and this resolution of disapproval would stop this costly and unfair policy.”
“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,” said Cassidy. “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.”
“Rather than seriously address the important issue of college affordability, President Biden’s income-driven repayment plan would spend hundreds of billions of dollars on arbitrary subsidies that will boost tuitions, increase borrowing, bolster low-quality institutions, support well-off doctors and lawyers, and expand the national debt. We commend the Senators working to rein in this costly uniliteral executive action and we encourage policymakers to work together on a responsible plan to truly improve the quality and affordability of higher education,” said Maya MacGuineas, President, Committee for a Responsible Federal Budget.
The nonpartisan Penn Wharton Budget Model (PWBM) issued a report that found the Biden IDR rule will cost U.S. taxpayers as much as $558.8 billion over 10 years by creating incentives for billions more in borrowing.
The IDR rule would encourage students take on more debt:
- Under this change to an originally targeted program, 91 percent of new student debt would be eligible for reduced payments and eventual transfer to taxpayers.
- On average, only $0.50 on every $1 borrowed will be repaid to taxpayers.
- The rule will turn the federal student loan financing system into a poorly-targeted, taxpayer-funded grant program.
- Even those who can fully afford their education would be leaving money on the table by not taking out loans they could expect to eventually be paid off by taxpayers.
- The PWBM found that the IDR rule will encourage community college students to collectively borrow billions more dollars per year due to the expectation that they will not have to pay the debt.
U.S. Senators John Thune (R-S.D.), John Cornyn (R-Texas), John Barrasso, M.D. (R-Wyo.), Mike Braun (R-Ind.), Ted Budd (R-N.C.), Shelley Moore-Capito (R-W.Va.), Mike Crapo (R-Idaho), Steve Daines (R-Mont.), Joni Ernst (R-Iowa), Chuck Grassley (R-Iowa), Ron Johnson (R-Wis.), James Lankford (R-Okla.), Cynthia Lummis (R-Wyo.), Roger Marshall, M.D. (R-Kan.), James Risch (R-Idaho), Mitt Romney (R-Utah), Tim Scott (R-S.C.), Thom Tillis (R-N.C.), and Tommy Tuberville (R-Ala.) also cosponsored the S.Res.43.
Representative Lisa McClain (R-Mich.) introduced a companion CRA resolution (H.J.Res.88) in the House.