Cornyn Introduces Resolution to Overturn Biden’s Newest Student Loan Scheme
WASHINGTON – U.S. Senator John Cornyn (R-TX) today introduced a joint resolution of disapproval under the Congressional Review Act with 16 of his Senate Republican colleagues to strike down President Biden’s reckless Income-Driven Repayment (IDR) rule, which will incentivize students to take on college loan debt, hurt Texas families, and cost taxpayers as much as $559 billion:
“The Biden administration’s latest election-year student loan stunt would force hardworking Texans to foot the bill for hundreds of billions of dollars in other people’s student loans,” said Senator Cornyn. “This resolution would stop this indefensible debt scheme in its tracks and shield Americans from an unfair financial burden.”
On June 30, the U.S. Supreme Court blocked President Biden’s first illegal student debt cancelation scheme that attempted to transfer hundreds of billions of dollars in student loan debt onto taxpayers. In response, the President announced three new student loan schemes, including his finalized Income Driven Repayment (IDR) rule that incentivizes taking on debt and shifts the burden to hardworking Americans. Under this rule, 91% of new student debt would be eligible for reduced payments and eventual transfer to taxpayers, and on average, only $0.50 on every $1 borrowed will be repaid. The IDR rule:
- Lacks any guardrails to prevent households making over $250,000 a year from collecting taxpayer-funded assistance if they file taxes separately.
- Reduces payments to 5%, from 10%, of borrowers’ discretionary income monthly on undergraduate loans.
- Raises the assumed amount of expenses to 225% of the Federal Poverty Line from 150%, increasing likelihood that a borrower would have no discretionary income and an expected loan payment of zero.
- An individual would need an income above $32,805 before being expected to pay anything.
- A family of four would need to have total income over $67,500 in 2023 (roughly equal to the median income of all households in the US) before being expected to pay anything.
- Covers unpaid monthly interest for loan payments less than the full amount, including zero payments, preventing the loan balance from growing.
- Forgives loan balances after 10 years of payments, instead of 20 years, for borrowers with loan balances of $12,000 or less. Adds one year for every additional $1,000, capping at 20 years for undergraduate loans and 25 years for graduate loans.
Sen. Cornyn was joined on the legislation by Ranking Member of the Senate Health, Education, Labor and Pensions (HELP) Committee Bill Cassidy, M.D. (R-LA) and Senators John Thune (R-SD), John Barrasso (R-WY), Mike Braun (R-IN), Mike Crapo (R-ID), Steve Daines (R-MT), Joni Ernst (R-IA), Chuck Grassley (R-IA), Cindy Hyde-Smith (R-MS), Ron Johnson (R-WI), James Lankford (R-OK), Cynthia Lummis (R-WY), Roger Marshall (R-KS), James Risch (R-ID), Tim Scott (R-SC), and Thom Tillis (R-NC).
Senator Cornyn has also introduced the Streamlining Accountability and Value in Education (SAVE) for Students Act, which would simplify the student loan repayment process for borrowers, increase accountability on behalf of the federal government, ensure new federal student loans are paying for degrees that actually produce higher incomes for graduates, and save taxpayers nearly $50 billion. That legislation is part of the Lowering Education Costs and Debt Act, a package of five bills spearheaded by Senate Committee on Health, Education, Labor and Pensions Ranking Member Bill Cassidy (R-LA) aimed at directly addressing the issues driving the skyrocketing cost of higher education and the increasing amounts of debt students take on to attend school.