GOP Seeks to Repeal Biden’s New Student Loan Payment Plan as Millions Sign Up

On Tuesday, Congressional Republicans announced a new effort to repeal President Biden’s new income-driven repayment plan, which administration officials have billed as the most affordable student loan payment plan ever.

The Saving on a Valuable Education (SAVE) plan is replacing the Revised Pay As You Earn (REPAYE) plan. Among other features, the SAVE plan will have a more favorable repayment plan formula than most other IDR options, a higher poverty exclusion limit, and an interest subsidy that will eliminate excess interest accrual and prevent any future balance growth when a borrower’s monthly payment is less than the amount of accruing interest. 

SAVE will also accelerate student loan forgiveness to as little as 10 years for borrowers with smaller initial balances. Other borrowers will receive loan forgiveness in 20 or 25 years, depending on whether they have graduate school loans. 

But Republican leaders in Congress have contended that the SAVE plan goes too far and will cost taxpayers too much money.

Here’s the latest.

Republicans will try to repeal Biden's new student loan repayment plan

House and Senate Republicans indicated that they will try to repeal the SAVE plan through a Congressional Review Act resolution. 

“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 Sen. Bill Cassidy (R-LA) in a statement on Tuesday. “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.”

“This scheme will leave mountains of debt at the feet of taxpayers while absolving millions of borrowers of their loans,” said Rep. Lisa McClain (R-MI) and House Education and the Workforce Committee Chairwoman Virginia Foxx (R-NC). “What’s worse is that future borrowers will take on loans expecting forgiveness, which in turn encourages schools to raise tuition rates.”

The Congressional Review Act allows Congress to repeal recently-enacted federal regulations. A joint resolution requires only simple majorities in the House and the Senate to pass, and would not be subject to a Senate filibuster. Most other legislation that passes the House must receive at least 60 votes in the Senate to overcome a filibuster. 

But even if successful, the resolution would still have to be signed by President Biden to become law. And Biden will not agree to repeal a signature feature of his student debt relief efforts. A two-thirds majority would be required in both the House and the Senate to overcome Biden’s expected veto. With near-even party control in both chambers, such a supermajority is highly unlikely.

A Congressional Review Act resolution to repeal Biden’s sweeping student loan forgiveness plan passed Congress earlier this year. But as expected, Biden vetoed that legislation. Republican leaders were unable to muster a two-thirds majority in either chamber to override the veto. The Supreme Court ultimately struck down Biden’s loan forgiveness plan in June.

Millions sign up for Biden's student loan repayment plan

As House and Senate GOP leadership unveiled the Congressional Review Act resolution, the Biden administration pressed ahead to tout the benefits of the new SAVE plan and encourage borrowers to sign up. Over 4 million borrowers have already enrolled in SAVE, according to the Education Department on Tuesday.

“Millions of borrowers are already benefitting from enrollment in the SAVE plan, and I'm thrilled to see so many Americans submitting applications every day so that they, too, can take advantage of the most affordable student loan repayment plan in history,” said U.S. Secretary of Education Miguel Cardona in a statement. “From Day One of this Administration, President Biden has focused on reducing the burden of student loan debt on working families, and we are not stopping now.”

The Education Department and its contracted loan servicers have begun outreach efforts to over 30 million borrowers, according to the statement. The Biden administration is also coordinating with outside groups to get the message out to borrowers that the SAVE plan is a good option. Efforts are ramping up as the student loan pause has ended, and borrowers will receive their first bills by October. 

How to apply for Biden's new SAVE plan

For borrowers who have already been in the Revised Pay As You Earn (REPAYE) plan, no action is necessary to enroll in SAVE. The SAVE plan is replacing the REPAYE plan, and borrowers in REPAYE will be automatically converted to SAVE. Many such borrowers have already started receiving notices from their loan servicers of the change in their repayment terms.

Other borrowers will need to enroll in SAVE by applying online at StudentAid.gov or contacting their loan servicer. The Education Department has overhauled the online IDR application system, and administration officials are encouraging borrowers to apply.

“The new application is easy and quick. Most people only need about 10 minutes to complete it,” said Federal Student Aid Chief Operating Officer Richard Cordray on Tuesday. “Borrowers can get their monthly payment calculated in real time, and they can choose to have their IDR application recertified automatically each year.” The new automatic annual recertification process is a new feature of the IDR system and is expected to cut down on longstanding problems associated with manual income recertification. 

“Borrowers applying for the SAVE plan or other IDR plans will see their new payment amount before submitting their application, and it will be displayed on their servicer's website when their first bill is sent,” said the Education Department. “Most borrowers who apply for the SAVE Plan can expect their next payment to reflect their SAVE amount. Servicers will place borrowers in a forbearance if they need more time to process their application. After borrowers apply, they can check the status of their application by visiting their account dashboard on StudentAid.gov.”