WASHINGTON – Today, U.S. Senators Jim Risch and Mike Crapo (both R-Idaho), Bill Cassidy, M.D. (R-La.) with 14 Republican colleagues introduced a Congressional Review Act (CRA) resolution to overturn President Biden’s reckless income-driven repayment (IDR) rule, which will result in a majority of bachelor’s degree student loan borrowers not having to pay back the principal on their loans. This will cost taxpayers as much as $559 billion. On June 30th, President Biden announced the final IDR rule following the U.S. Supreme Court ruling to block his illegal student debt scheme that attempted to transfer hundreds of billions of dollars in student loan debt onto taxpayers.
“President Biden’s latest student loan scheme is even more expensive than his original ‘forgiveness’ gimmick,” said Risch. “Taxpayers will foot the bill for this nearly $500 billion plan, which will incentivize risky financial decisions and make college even more expensive. This congressional review act sends a clear message to the president that this plan cannot stand.”
“The Biden Administration’s newest attempt at student loan forgiveness continues to place the burden of our nation’s exorbitant student loan debt on taxpayers,” said Crapo. “We should be doing more to address America’s already record-high inflation instead of contributing to an ever-growing national debt.”
“Once again, Biden’s newest student loan scheme only shifts the burden from those who chose to take out loans to those who decided not to go to college, paid their way, or already responsibly paid off their loans,” said Cassidy. “Our resolution protects the 87 percent of Americans who don’t have student debt and will be forced to shoulder the burden of the President’s irresponsible and unfair policy.”
Risch, Crapo, and Cassidy are joined by U.S. Senators John Thune (R-S.D.), John Cornyn (R-Texas), John Barrasso (R-Wyo.), Mike Braun (R-Ind.), Steve Daines (R-Mont.), Joni Ernst (R-Iowa), Chuck Grassley (R-Iowa), Cindy Hyde-Smith (R-Miss.), Ron Johnson (R-Wis.), James Lankford (R-Okla.), Cynthia Lummis (R-Wyo.), Roger Marshall (R-Kansas), Tim Scott (R-S.C.), and Thom Tillis (R-N.C.).
The IDR rule encourages Americans to incur debt without taking responsibility:
- Under this change to an originally targeted program, 91% of new student debt would be eligible for reduced payments and eventual transfer to taxpayers.
- On average, only $0.50 on every $1 borrowed will be repaid to taxpayers.
- This rule will turn the federal student loan financing system into a poorly targeted taxpayer-funded grant program.
- Even those who can fully afford their education would be leaving money on the table by not taking out loans they could expect to eventually be paid off by taxpayers.
- The Penn Wharton Budget Model found that the IDR rule will incentivize community college students to collectively borrow billions more dollars per year due to the expectation that they will not have to pay the debt.
For additional information on the Biden administration’s rule click here.
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