House Republicans introduced a student debt plan amid anticipation of a Supreme Court ruling on President Biden’s loan forgiveness program.
The Federal Assistance to Initiate Repayment (FAIR) Act, spearheaded by Republican members of the House Education and Workforce Committee, proposes targeted relief for student loan borrowers who have already repaid more than the original principal and interest owed to taxpayers.
Resumption of Federal Student Debt Payments
The act aims to streamline multiple existing income-driven repayment plans into a single system and offer defaulted borrowers an opportunity to rehabilitate their loans.
Representatives Burgess Owens (R-Utah), Lisa McClain (R-Mich.), and Virginia Foxx (R-N.C.), the committee chair, emphasized that this Republican solution addresses the shortcomings of the student loan system, provides borrowers with clear repayment guidance, and safeguards taxpayers from the economic consequences of the administration’s free college agenda.
Federal student loan payments, which have been on pause since March 2020 under the CARES Act signed by former President Donald Trump, are set to resume at the end of August as per the debt ceiling law recently enacted by President Biden.
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Eliminating Time-Based Repayment
Owens, McClain, and Foxx noted that these extensions created uncertainty for schools, loan servicers, and students, highlighting the need for borrower guidance.
Under the proposed legislation, the Department of Education would be required to provide student loan borrowers with at least 12 notifications prior to resuming repayments.
Additionally, the bill seeks to eliminate time-based student loan repayment, which allows borrowers to make recurring payments over a fixed period.
Simultaneously, a group of Senate Republicans led by Senator Bill Cassidy (R-La.) introduced their own legislation focused on student debt. Their plan, distinct from the House bill, comprises five measures that enhance transparency regarding college costs and student loans, streamline repayment options, and mitigate rising tuition expenses, particularly for graduate school borrowing.
Senator Cassidy stated that their proposal addresses the underlying causes of the student debt crisis, unlike President Biden’s plan.
Congress previously attempted to halt Biden’s proposal for up to $20,000 in student debt relief for specific borrowers, but the measure was vetoed by President Biden.
The Republican-led effort passed the House in May primarily along party lines, with a few moderate Democrats joining Republicans in the Senate’s approval of the bill earlier this month.
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