USA TODAY International Edition

Senate GOP reveals student loan reform plan

It targets ‘ skyrocketi­ng’ higher education costs

- Ella Lee Contributi­ng: Medora Lee

Senate Republican­s have unveiled their plan to address America’s student debt crisis as a Supreme Court decision on President Joe Biden’s forgivenes­s plan is expected any day.

The GOP package, called the Lowering Education Costs and Debt Act, is made up of five bills meant to target issues that are driving “skyrocketi­ng” higher education costs, according to Sen. Bill Cassidy, R.- La., who introduced the legislatio­n Wednesday alongside four other Republican­s.

Roughly 45 million Americans have federal student debt, amounting to more than $ 1.6 trillion in borrowed money. Even if Biden’s student loan forgivenes­s plan is upheld by the Supreme Court, outstandin­g debt will return to its current levels in just five years, according to the Committee for a Responsibl­e Federal Budget.

Student loan forgivenes­s “is not a fix; this is merely a Band- Aid, and the BandAid saddles taxpayers with a burden again in five years,” Cassidy said at a news conference Wednesday. “That’s why this morning we introduced the Lowering Education Costs and Debt Act ... and unlike President Biden’s plan, this actually addresses the root causes of the student debt crisis.”

Republican Sens. Chuck Grassley, of Iowa; John Cornyn, of Texas; Tommy Tuberville, of Alabama; and Tim Scott, of South Carolina, joined Cassidy in introducin­g the legislatio­n.

What’s in the GOP legislatio­n?

The first bill, dubbed the College Transparen­cy Act, would reform the college data reporting system to make informatio­n about outcomes at universiti­es − such graduation rates and debt after graduation − more accessible.

● Cassidy noted Wednesday that Americans don’t buy cars or houses without comparing prices, quality and financial operations options. He suggested that similar resources for higher education should be readily available.

The second bill, titled the Understand­ing the True Cost of College Act, would require colleges and universiti­es to use uniform financial aid letters that are clear on the costs associated with attending the institutio­n.

● Grassley, who first introduced the bill in 2019, said Wednesday that uniform letters would make it easier for prospectiv­e students to compare offers across schools.

The third bill, called the Informed Student Borrowing Act, would require prospectiv­e students to be provided with additional informatio­n about their loans, including the duration of their loan, their expected monthly payment and how much money they’re likely to make after attending their school and program of choice, according to Daines, who introduced the measure Wednesday.

● Students would be required to acknowledg­e they received counseling material or participat­e in entrance counseling each year.

The fourth bill, the Streamlini­ng Accountabi­lity and Value in Education ( SAVE) for Students Act, introduced by Cornyn, would reduce the nine student loan repayment options offered by the Department of Education to two options: the standard 10- year repayment plan and the REPAYE program, which allows low- income borrowers with low balances on their loans to receive forgivenes­s sooner.

The bill would also limit loans for undergradu­ate programs where former students can’t earn more than a high school graduate, or graduate programs where former students can’t earn more than a bachelor’s degree recipient.

Cornyn argued that the legislatio­n would not disadvanta­ge liberal arts educations, which can correlate with lower income after graduation.

The fifth bill, the Graduate Opportunit­y and Affordable Loans ( GOAL) Act, would end Graduate PLUS loans, which have no borrowing limit, in an effort to pressure graduate schools into lowering costs. Tuberville, who introduced the bill, called those loans “inflationary” and said they have contribute­d to the increased costs of college.

Fate of debt relief with top court

In August 2022, Biden announced he would cancel at least $ 10,000 in student loan debt for millions of borrowers, as well as $ 20,000 to Pell Grant recipients. The plan was quickly met with several legal challenges, two of which landed before the Supreme Court.

A decision on Biden’s plan is expected this month. But if the Supreme Court doesn’t rule on Biden’s plan before June 30, interest will begin adding up again on Sept. 1, and borrowers can expect to resume payments on their loans in October. The Biden administra­tion agreed it wouldn’t postpone the end of the “final” pause on repayments as part of the debt ceiling deal with Republican­s.

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