intending to overturn a Biden administration policy that allows federal student loan borrowers to take advantage of new income-driven repayment plans.
While the resolution likely won’t get movement due to a Democratic majority in the Senate, it shows that the issue of student debt is not going away anytime soon. Some of the Senate Republicans say taxpayers should not take on the burden of growing college debt.
the Department of Education has provided assistance for over 43 million borrowers. Some of the assistance varies, ranging from the government paying the interest on loans while a student is in college all the way up to full grants.
As of earlier this week, 4 million borrowers have applied for the SAVE Plan, which could save many borrowers about $2,000 a year in payments. The Republicans that claims the plan would cost taxpayers about $559 million over the next 10 years.
“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 Sen. Bill Cassidy, R-La. “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.”
The White House has touted the new plans as a response to its failed attempt to forgive up to $20,000 in student loan debt among low and middle-income borrowers.
Previously, borrowers using income-driven repayment plans on undergraduate loans were expected to pay 10% of their discretionary income. Discretionary income was previously considered any dollar made above 150% of the poverty level.
Now, borrowers with only undergraduate loans will be expected to pay 5% of their discretionary income. The amount considered discretionary income increased to 225% of the federal poverty level.
Previously, a borrower with undergraduate loans with a family of four with an income of $70,000 living in the continental U.S. would have been expected to pay about $2,500 a year — or $208 a month — in payments. Under the revised plan, that person would pay about $125 a year — or just over $10 per month — in student loan payments.