Hi Mike,

Over the past three years, the Biden Administration has been steadily making progress in fixing our broken student loan system. Through more than $136 billion in debt relief and improving Income-Driven Repayment (IDR) and Public Service Loan Forgiveness (PSLF), millions of borrowers are experiencing some breathing room from the overwhelming burden of student debt.

Unsurprisingly, right-wing policy makers and industry special interests continue to dig their heels in, trying to halt the steady forward movement of the Administration's progress at any and all costs to borrowers. The most recent obstructionist effort was unveiled January as Representative Virginia Foxx (R-NC) introduced the “College Cost Reduction Act”—legislation that, despite its name, would actually make a higher education more expensive, push millions of students and families into the grips of the predatory private student loan market, and roll back the Biden Administration efforts to make student loan payments affordable and provide critical relief to millions.

Yesterday, the bill was voted out of the House Education and Workforce Committee on a party line vote and will move to the full House of Representatives for consideration. The 224 page bill would drastically overhaul the higher education system. For purposes of today’s overview, we have focused on the proposals that could directly impact student loan borrowers and their families. 

Here’s what this bill would do:

• Eliminate the array of student loan repayment options for future borrowers, including the Saving on A Valuable Education (SAVE) plan, the most generous option to date. The bill would instead establish two different repayment options—a standard 10-year repayment option and a new “repayment assistance plan” tied to a borrower's income. This plan is far less generous than the SAVE plan, would require low-income borrowers to pay more each month and does not provide a window of forgiveness—essentially locking a low-income borrower into repayment for the rest of their lives.

• Set caps on financial aid and sunset the Grad PLUS and Parent PLUS loan programs. Instead of investing in financial aid programs like the Pell Grant, which would help students and families cover the skyrocketing costs of college, the bill would set caps on the total amount of financial aid a student could receive and eliminate the Grad PLUS and Parent PLUS loan programs. Capping financial aid and eliminating access to these federal loan programs will leave students with a funding gap, which could push them into the dangerous and risky private student loan market and could even drive higher education out of reach altogether. Private student loans also lack the same benefits and protections that come embedded with federal student loans, including access to a payment based on your income, discharge in the case of a permanent disability, and potential eligibility for Public Service Loan Forgiveness. 

• Remove important safeguards that protect students and hold predatory schools accountable. The bill repeals many regulatory rules like Borrower Defense to Repayment and Closed School Discharge which support borrowers seeking loan discharge after being defrauded or misled by their school or after an abrupt school closure. The bill also eliminates the Gainful Employment Rule and the 90/10 Rule which would reopen the door for predatory colleges to offer low-quality programs and target student veterans.

• Fail to properly invest in and address chronically-underfunded public colleges and universities. While masquerading as a bill to support students and families, the bill includes no new meaningful resources that would invest in our public higher education as the public good that it is. Without robust investments in the Pell Grant and fixing funding inequities at community colleges, Historically Black Colleges and Universities (HBCUs), and other Minority Serving Institutions, students and families will continue to have to take on record levels of student debt for the chance at a college degree. 

This bill, to no surprise, is just the latest in right-wing efforts to roll back the Biden Administration’s efforts to fix the broken student loan system and improve the lives of borrowers. After all, this bill is being led by the same folks who successfully convinced the Supreme Court to block President Biden’s original, legal student debt cancellation program. Instead of ending their obstruction campaign and working with the Biden Administration to ensure their constituents get much-needed relief, this proposal will roll back years of progress and push borrowers and families further into the red. 

Spread the word about this bill:

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Borrowers and policymakers must see this proposal for what it is: nothing more than a ‘Foxx’ in sheep’s clothing.

Aissa Canchola Bañez

Senior Advisor for Policy and Strategy

Student Borrower Protection Center

P.S. Debt Collective has created a new tool that generates an individual appeal to the Department of Education demanding that they cancel your federal student loans. The more petitions for individual cancellations, the more pressure the Department feels to cancel student debt. Join the movement and help make history!