A group of 130 Republicans in Congress is demanding that the Biden administration withdraw its plan to cancel $147 billion of federal student loan debt.
They argue that it is unfair for Americans who didn’t borrow or have already paid off their loans.
This debt cancellation plan, popularly called “Plan B,” has been in the works since last summer, when the U.S. Supreme Court ruled that President Joe Biden overstepped his authority when he tried to use the COVID-19 public health emergency as an excuse to erase up to $20,000 for each eligible borrower.
As many as 43 million Americans were expected to have benefitted from the $430 billion plan, with almost half of them having all of their student loans wiped out.
President Biden’s new proposed regulations, which his administration believes will hold up against legal challenges, formally rolled out on April 17.
It provides full or partial relief for approximately 28 million borrowers who fall into five categories, including those who owe more than they initially borrowed as a result of accumulated interest, along with those who have been making repayments for more than 20 years.
Plan B is estimated to cost $147 billion over 10 years. The most expensive item concerns interest, and includes canceling all of the accrued interest for low-income borrowers. According to the U.S. Department of Education, some 26 million borrowers would either have their accrual eliminated or see up to $20,000 of interest canceled if they owe more than they initially took out.
Congressional Democrats have supported the plan, but their Republican colleagues have lambasted it as yet another unconstitutional and costly attempt to shift the burden onto taxpayers and buy votes.
Highlighting the estimated $147 billion price tag, the Republicans argue that Plan B is just as ambitious—if not more so—than Plan A, which the nation’s highest court shot down.
‘Help the Wealthy’
Led by House Education Committee Chairwoman Virginia Foxx (R-N.C.) and Senate Education Committee ranking member Bill Cassidy (R-La.), the group further argued that the proposal would disproportionately “help the wealthy,” pointing to an analysis by the Wharton School of the University of Pennsylvania.According to Wharton researchers, the new plan would “relieve some longer-term student debt for about 750,000 households making over $312,000 in average household income.”
This is because the Biden administration’s income-driven repayment plan, dubbed SAVE, already provides long-term debt relief to households with lower incomes.
The lawmakers also expressed skepticism over the Biden administration’s claim that Plan B, unlike its predecessor, is legally sound.
The new regulations do not rely on any presidential emergency power. Instead, they are created through a process called negotiated rulemaking with the Education Department’s authority under the Higher Education Act of 1965.
That law describes how the education chief could “enforce, pay, compromise, waive, or release any right, title, claim, lien, or demand, however acquired, including any equity or any right or redemption.”
“Plan B hinges on creating these extensive regulations based on scant statutory text written in 1965,” the Republicans wrote.
“This statute has no history of broad use by any previous Secretary and was previously deemed by this administration as less likely to hold up in court than Plan A.”
Mr. Cardona, meanwhile, has said his department is “unapologetic” about the “commitment to provide relief to as many borrowers as possible as quickly as possible.”
“We have received the letter, which was also submitted as a public comment on our Notice of Proposed Rulemaking,” a spokesperson for the Education Department told The Epoch Times in response to a request for comments.
“As part of the rulemaking process, we review and respond to all comments, which will be included in the final rule. We welcome input from members of the public, including from members of Congress.”
“This rulemaking process is about standing up for borrowers who’ve been failed by the country’s broken student loan system and creating new regulations that will reduce the burden of student debt in this country,” the spokesperson added.
The Biden administration so far has canceled almost $160 billion in student loan debt for 4.6 million borrowers, mostly benefiting those on income-driven repayment (IDR) plans and longtime public-sector workers such as teachers and nurses.
