The Department of Education restarted debt collection last month, after President Joe Biden’s failed attempt to cancel many borrowers’ student loans.
Biden may have seen his student debt plan nixed by the Supreme Court, but his administration is now allowing borrowers to apply for a new, similar program.
Even NPR has called the new measure “sneaky.”
The SAVE, or “Saving on a Valuable Education,” plan allows borrowers to make lower payments based on a percentage of their discretionary income.
The Biden administration introduced the plan in August, and it bears a striking resemblance to the one already struck down in court.
The White House claimed in a memo, “The Saving on a Valuable Education (SAVE) income-driven repayment plan calculates payments based on a borrower’s income and family size – not their loan balance – and forgives remaining balances after a certain number of years.”
The administration describes the SAVE plan as a procedural “rule” rather than a law, and it claims to be applying the rule to “millions of low-income borrowers.”
“The SAVE plan is already helping close to 5.5 million Americans in every Congressional district as they return to student loan repayment by providing them with a plan that allows them to make affordable payments while also supporting their economic stability,” the White House wrote.
Congressional Republicans pointed out that the administration is simply encouraging colleges to raise tuition, and that it treats the taxpayers unfairly.
Sen. Bill Cassidy, R-La., introduced a Congressional Review Act resolution, a measure to require congressional approval for altering debt collection on student loans.
In a statement, Cassidy instead endorsed the Lowering Education Costs and Debt Act, a “package of five bills aimed at directly addressing the issues driving the skyrocketing cost of higher education.”
President Joe Biden promised to veto the Congressional Review Act resolution.
“If the President were presented with S.J. Res. 43, he would veto it,” the White House said.
The Democrat-controlled Senate voted against the resolution the next day, Nov. 15.
The Department of Education first halted student loan payments in March 2023.
In June of this year, the Supreme Court killed Biden’s $400 billion plan to cancel or reduce student debts. The Biden administration would have reduced monthly payments, stopped the interest from compounding under certain circumstances, and forgiven up to $10,000 in student debt for each borrower (or $20,000 for Pell Grant recipients).
The court held that the administration needed Congress’ endorsement before undertaking so costly a program. They rejected Biden’s argument that the 2003 HEROES Act grants a president this kind of power.
Afterward, Biden turned to the Higher Education Act. He described the law as “the best path that remains to provide as many borrowers as possible with debt relief.”
The Associated Press contribtued to this article.