Senate Republicans introduce plan to tackle student loan debt

Senate Republicans are unveiling their own plan to tackle student debt as the Supreme Court is set to rule soon on President Biden’s student debt relief program. 

The GOP package, called the “Lowering Education Costs and Debt Act,” consists of five bills that the senators say will address the root causes of the student debt issue such as the increasing price of college and students taking out loans they can’t afford. 

The package was introduced by five Republican senators: Bill Cassidy (La.), the ranking member of the Senate Health, Education, Labor, and Pensions Committee; Chuck Grassley (Iowa), John Cornyn (Texas), Tommy Tuberville (Ala.) and Tim Scott (S.C.). 

The first two bills in the package specifically deal with how colleges give students information before they decide to attend. 

The “College Transparency Act (CTA)” would reform the college data reporting system so students have better information about outcomes at schools before committing to a university.

The “Understanding the True Cost of College Act” will require schools to have a similar style for their financial aid letters with a breakdown of the aid so students can better compare offers. 

The last three bills deal directly with student loans, including how information is given to borrowers and limiting some borrowing. 

The “Informed Student Borrower Act” requires students to be more informed when applying for a loan by acknowledging they received student loan entrance materials or they participated in entrance counseling.

The students would receive materials that show how long it would take to pay off their loans, how much the monthly payments would be and what they will likely make going to a certain school and program. The students would receive this information yearly.

The fourth bill addresses the nine different student loan repayment options the Department of Education offers. These options, with eligibility based on income and loan type, gave borrowers different timeline options for paying off their loans and the amount they would owe each month.

The bill cuts those repayment options down to two to simplify the process. The standard 10-year repayment plan for borrowers would remain and the REPAYE program would stay, with some changes. The REPAYE program gives loan forgiveness earlier to low-income individuals who have low balances on their loans.

Additionally, loans can not be given to undergraduate or graduate programs that have shown the earning potential is not higher than a high school graduate or bachelor’s degree under the bill. 

The last bill in the package aims to put pressure on graduate schools to lower costs, which account for almost half of student loan debt taken out each year.

The legislation would end Graduate PLUS loans, which had their borrowing limit removed in 2006. Republicans say this type of loan has increased the cost of college, calling it “inflationary.” Students would still have other loan options for graduate school such as Stafford loans, which are offered by the government, but have limits on borrowing.

“Our federal higher education financing system contributes more to the problem than the solution. Colleges and universities using the availability of federal loans to increase their tuitions have left too many students drowning in debt without a path for success,” Cassidy said. 

“Unlike President Biden’s student loan schemes, this plan addresses the root causes of the student debt crisis. It puts downward pressure on tuition and empowers students to make the educational decisions that put them on track to academically and financially succeed,” he added.

While Republicans do not control the Senate, they have a shot at getting their bill passed if it attracts support from centrist Democrats such as Joe Manchin (W.Va.).

Manchin and Sen. Jon Tester (D-Mont.), along with Independent Sen. Kyrsten Sinema (Ariz.), recently joined with Republicans in a vote to end Biden’s student debt relief plan, which was vetoed by the White House. 

The package was released as the Supreme Court could rule any day on the legality of Biden’s student debt relief, giving Republicans a plan to present if the high court strikes down the president’s program.