Senate Republicans have announced their own plan to address student debt, which was introduced as the Supreme Court prepares to rule on President Biden’s student debt relief program. The GOP’s “Lowering Education Costs and Debt Act” comprises five bills aimed at tackling the underlying causes of the student debt crisis, including rising tuition fees and students taking out loans they cannot afford. The package was initiated by Senators Bill Cassidy, Chuck Grassley, John Cornyn, Tommy Tuberville, and Tim Scott.
Two of the package’s bills deal specifically with how colleges provide information to prospective students. The “College Transparency Act” would reform the way colleges report on outcomes of their graduates to provide more accurate and useful information for prospective students. On the other hand, the “Understanding the True Cost of College Act” would require colleges to use a standardized format for financial aid letters, including a breakdown of the aid offered, so that students can compare offers more easily.
The remaining three bills in the package concern student loans and look at improving the information provided to borrowers and limiting some forms of borrowing. The “Informed Student Borrower Act” requires individuals to acknowledge receipt of student loan entrance materials, and the materials must include information about loan repayment periods, monthly payment amounts, and potential earnings for graduates of specific programs. This information will be given to students annually.
One of the remaining bills in the package aims to simplify the nine different student loan repayment options available. The proposal cuts that number down to two, leaving the 10-year standard repayment plan in place and modifying the REPAYE repayment plan. The latter provides loan forgiveness to students with low balances and low incomes.
Undergraduate or graduate programs that have not been shown to lead to higher earning potential than high school graduates or bachelor’s degree holders will be ineligible for loans under the bill. The final proposal in the package aims to put pressure on graduate schools to reduce costs, which account for almost half of all student loan debt taken out each year. If passed, this legislation would end Graduate PLUS loans, a type of loan that has been left unrestricted since 2006 and that Republicans consider “inflationary.”
Sen. Cassidy remarked that “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. 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.”
Although Republicans do not control the Senate, they have a chance of winning approval for the bill if it gains the support of centrist Democrats, including Sen. Joe Manchin. Manchin recently joined with other senators, including Jon Tester and Kyrsten Sinema, in a vote to overturn President Biden’s student debt relief plan, which was vetoed by the White House. The Republican package was released ahead of a possible Supreme Court decision on the legality of Biden’s student debt relief program, providing the GOP with a plan to present should the high court strike down the president’s initiative.
Overall, the GOP’s Lowering Education Costs and Debt Act represents one approach to addressing student debt and the growing student loan crisis. With rising tuition costs and student debt levels that have reached unsustainable levels, addressing the root causes of the problem is critical to helping students cope with the costs of higher education and providing them with the resources necessary to succeed academically and financially. Whether the bill gains the support needed to become law remains to be seen, but the issue of student debt, and how it is addressed, will remain a key concern for lawmakers and students alike.