WASHINGTON—U.S. Senator Mitt Romney (R-UT) joined nearly 70 of his colleagues, led by Senator Bill Cassidy, M.D. (R-LA), Ranking Member of the Senate Health, Education, Labor and Pensions (HELP) Committee in calling on the Biden administration to rescind its reckless Income Driven Repayment (IDR) rule proposal, which would reduce the amount of student loan debt borrowers have to pay back by 40 percent. According to Penn-Wharton, the IDR proposal will cost taxpayers an estimated $361 billion over the next ten years, while another non-partisan student loan expert believes it could cost up to $1 trillion.
“This proposed regulation… would turn a safety-net for low-income federal student loan borrowers into an unsustainable transfer of wealth from hardworking taxpayers to college-educated individuals,” wrote the lawmakers. “This proposal ultimately turns the Direct Loan program, which provides millions of Americans with the opportunity to move up the economic ladder, into an untargeted grant. This is a drastic shift in policy which you do not have the legal authority to make.
“Borrowing for college will become the default for every household, including for those who can afford to pay and otherwise would have paid out-of-pocket,” they continued. “This proposal is reckless, fiscally irresponsible, and blatantly illegal and, as such, it should be rescinded.”
Senators Romney and Cassidy are joined by Senate Republican Leader Mitch McConnell (R-KY), Senate Republican Whip John Thune (R-SD), and Sens. John Barrasso (R-WY), Joni Ernst (R-IA), Steve Daines (R-MT), Marsha Blackburn (R-TN, John Boozman (R-AR), Mike Braun (R-IN), Katie Britt (R-AL), Ted Budd (R-NC), John Cornyn (R-TX), Tom Cotton (R-AR), Kevin Cramer (R-ND), Mike Crapo (R-ID), Ted Cruz (R-TX), Lindsey Graham (R-SC), Chuck Grassley (R-IA), Bill Hagerty (R-TN), John Hoeven (R-ND), Cindy Hyde-Smith (R-MS), James Lankford (R-OK), Mike Lee (R-UT), Cynthia Lummis (R-WY), Roger Marshall (R-KS), Jerry Moran (R-KS), Markwayne Mullin (R-OK), Jim Risch (R-ID), Tim Scott (R-SC), Rick Scott (R-FL), Thom Tillis (R-NC), Tommy Tuberville (R-AL), Roger Wicker (R-MS), Todd Young (R-IN), and Shelley Moore Capito (R-WV). They are also joined by 32 members of the U.S. House of Representatives, led by Representative Virginia Foxx (R-NC), Chair of the House Education and the Workforce Committee.
The proposed rule would:
- Cancel the full debt of 20 percent of bachelor’s degree holders and will allow a majority of all borrowers to pay back less than half of what they borrowed.
- Reduce payments to 5% of borrowers’ discretionary income monthly on undergraduate loans. This is down from the current 10%.
- Raise the amount of income that is considered non-discretionary income and is therefore protected from repayment to 225% of the Federal Poverty Line from 150%.225% ($32,805 for an individual/$67,500 family of 4)
150% ($21,870 for an individual/$45,000 family of 4).
- Cover borrowers’ unpaid monthly interest, so that unlike existing income-driven repayment plans, no borrower’s loan balance will grow.
- Forgive loan balances after 10 years of payments, instead of 20 years, for borrowers with loan balances of $12,000 or less.
- Allow graduate borrowers to pay a percent of discretionary income between 5% and 10% based on sizes of amount borrowed for undergraduate and graduate loans.
Read the full letter here.