North Carolina U.S. Rep. Virginia Foxx, chairwoman of the House Committee on Education and the Workforce, is fighting against President Joe Biden's efforts to transfer student loan debt to taxpayers. Biden's latest package would cancel up to $750 billion in obligations for borrowers, which would be at the expense of taxpayers. Foxx argues that transferring the cost from students to taxpayers does not reduce the overall cost of higher education. She proposes the College Cost Reduction Act, which includes provisions to streamline the application process, improve transparency, and strengthen accountability for colleges and universities. The act would save taxpayers $186 billion if enacted this year. Foxx emphasizes the importance of lowering costs and ensuring value for students and taxpayers.
President Joe Biden has announced the cancellation of an additional $7.7 billion in student loan debt, benefiting 160,000 borrowers. This brings the total amount of student loan debt forgiven by the Biden administration to $167 billion, benefiting 4.75 million people. The loans being canceled are associated with three loan programs: the Public Service Loan Forgiveness program, the Saving on a Valuable Education (SAVE) repayment plan, and borrowers who have been making payments for at least 20 years. The Biden administration is facing legal challenges from 11 states led by Republican attorneys general who claim that the administration lacks the authority to unilaterally forgive student loan debt. Despite the opposition, the Biden administration continues to pursue its debt relief initiatives, with a new loan forgiveness program currently in the rule-making process that could benefit over 30 million borrowers.
Missouri Attorney General Andrew Bailey is taking the Biden Administration to court over the cancellation of student loan debt without the approval of Congress. Bailey argues that Biden is sidestepping the Constitution by burdening working Missourians with a half trillion dollars in college debt. He cites a 2023 U.S. Supreme Court ruling that struck down a previous attempt by the President to forgive student loan debt. Arkansas, Florida, Georgia, North Dakota, Ohio, and Oklahoma have joined Missouri's lawsuit against Biden. The Biden rule Missouri is working to block is scheduled to begin on July 1st. The federal judge in the Eastern District of Missouri could rule at any time.
In a recent development, two federal judges in Kansas and Missouri have partially blocked President Joe Biden's administration from moving forward with a key student debt relief initiative. U.S. District Judge Daniel Crabtree in Wichita, Kansas, blocked the U.S. Department of Education from proceeding with parts of a plan set to take effect on July 1 that would lower monthly payments and speed up loan forgiveness for millions of Americans. U.S. District Judge John Ross in St. Louis, Missouri, issued a preliminary injunction barring the department from granting further loan forgiveness under the administration's Saving on a Valuable Education (SAVE) Plan. The SAVE Plan provides more generous terms than past income-based repayment plans, lowering monthly payments for eligible borrowers and allowing those with original principal balances of $12,000 or less to have their debt forgiven after 10 years. The broader plan to cancel up to $20,000 in debt for up to 43 million Americans was blocked by the conservative-majority U.S. Supreme Court in June 2023. The White House has said that over 20 million borrowers could benefit from the SAVE plan. The administration in May said that 8 million are already enrolled, including 4.6 million whose monthly payments have been reduced to $0. Republican state attorneys general argued that the rule that created the SAVE Plan was unlawful and that the Education Department lacked authority to create it. The administration had estimated the SAVE Plan would cost $156 billion over 10 years, but the states said it would now cost $475 billion over a decade.
Exactly one year ago, President Joe Biden stood before the American people after the politicized U.S. Supreme Court ripped away critical relief from 40 million borrowers. President Biden has worked to deliver debt relief to nearly 5 million student loan borrowers, but federal judges in Kansas and Missouri have issued injunctions blocking portions of the new Saving on a Valuable Education repayment plan. Young borrowers are being devastated by the student loan crisis, inhibiting their ability to start a family, buy a home, save for retirement, or start a business. The Administration has yet to publish a proposed rule on hardship for student debt relief, and if the rule is pushed to the next administration, young borrowers may be cut out of relief entirely. Providing relief to young borrowers must be a priority.
In Virginia, lawmakers have reached a deal to repeal new restrictions on a program that offers free college tuition at state schools for families of military veterans who were killed or seriously disabled while on active duty. The program's costs have risen from $12 million to $65 million in five years. The new proposal sets aside $65 million each year for the program, while the Joint Legislative Audit and Review Commission studies it, along with a task force appointed by Governor Glenn Youngkin and a Senate work group. Members of the Senate and the House of Delegates will return to Richmond on July 18 to vote on the agreement. [487180cb]