Charleston Leader

WASHINGTON, D.C. – On May 21, 2024, U.S. Senator Shelley Moore Capito (R-W.Va.), Ranking Member of the Senate Appropriations Subcommittee on Labor, Health and Human Services, Education, and Related Agencies (Labor-HHS), joined a coalition of 129 lawmakers in addressing a letter to U.S. Department of Education Secretary Miguel Cardona. The group urged the department to withdraw its latest proposal to transfer student loan debt to American taxpayers.

The proposed rule is projected to cost an additional $147 billion, potentially raising the total student loan debt transferred to taxpayers to approximately $1 trillion. This initiative was led by U.S. Senator Bill Cassidy (R-La.), Ranking Member of the Senate Health, Education, Labor, and Pensions (HELP) Committee, and U.S. Rep. Virginia Foxx (R-N.C.-05), Chairwoman of the House Education and the Workforce Committee.

“The latest Notice of Proposed Rule Making (NPRM) proposed by your Department of Education on April 17, 2024, represents the latest in a string of reckless attempts to transfer as much as $1 trillion of student loan debt from those who willingly borrowed to those who did not or have already repaid their loans,” wrote the lawmakers. “In addition to the fiscally irresponsible nature of this backdoor attempt to enact ‘free’ college, the administration continues to use borrowers as political pawns knowing full well these proposed actions are illegal. The Supreme Court has made it abundantly clear that there is zero authority to write-off federal student loans en masse last June when the Department’s ‘Plan A’ was ruled unconstitutional.”

“Instead of exacerbating the problems of inflated college costs and low-value degrees, we urge you to withdraw this NPRM and work with Congress. It is past time that we fix our nation’s broken higher education financing system,” they continued.

BACKGROUND:

The plan specifically targets recipients with typical incomes exceeding $300,000 for loan forgiveness. Critics argue that while prioritizing student loan schemes, the Biden administration has failed to properly implement the Congressionally-mandated Free Application for Federal Student Aid (FAFSA). These delays prevent students and families from accessing crucial financial aid information.

At a recent Labor-HHS Subcommittee hearing reviewing President Biden’s proposed Fiscal Year 2025 budget for Education, Senator Capito questioned Secretary Cardona about his agency's focus on student loan forgiveness over resolving issues with FAFSA.

The letter further states: "The Biden administration describes this regulation as 'targeted relief,' yet estimates show otherwise. At an estimated cost of $147 billion, taxpayers are being forced to take on nearly 28 million borrowers' debts." It also notes that borrowers eligible for relief under certain provisions typically earn over $300,000 annually.

The lawmakers contend that this regulation is part of a broader strategy termed “Plan B.” This plan relies on regulations based on statutory text from 1965 which gives broad authority but was not intended for mass cancellation of student loans. According to experts, these additional changes could increase Plan B's total cost near $750 billion.

Moreover, while drafting this proposal aimed at benefiting those who attended college already, the administration failed in implementing FAFSA effectively—a tool designed for current and prospective college attendees needing financial aid information promptly.

In conclusion: “Instead of exacerbating problems related to inflated college costs and low-value degrees," they urged withdrawal from NPRM while working alongside Congress towards fixing America’s higher education financing system.

Sincerely,

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