White House says 4 million have enrolled in student debt plan as GOP prepares challenge
Haisten Willis
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The Biden administration is talking up high enrollment for its new student loan plan even as Republicans prepare to challenge the program.
More than 4 million people have signed up for the new Saving on A Valuable Education, or SAVE, plan. But as with President Joe Biden‘s previous moves in the student loan space, there’s no guarantee any of them will actually see it come to fruition.
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The White House has been laying the groundwork for the SAVE plan since mid-2022. The program would limit monthly repayments and cap interest accrual based on income and family size.
“None of [these borrowers] will owe payments if they earn less than about $15 an hour, or more if they support families,” said James Kvaal, undersecretary at the Department of Education, on a Tuesday morning call with reporters. “Everyone else will save more than $1,000 a year compared to remaining on the REPAYE plan.”
The SAVE plan also ensures that balances won’t grow due to unpaid interest as long as payments are kept up with. Those making less than about $30,000 a year won’t pay anything at all, while other borrowers will pay no more than 5% of their income above that amount. Any unpaid amounts would be forgiven, with remaining balances transferred to taxpayers, after no more than 20 years.
“I’m really thrilled to talk about the very impressive response we’ve seen since launching the SAVE plan,” Kvaal said. “It’s important to remember that this plan is very new. President Biden announced it on the last day of June. The application was made available as a soft launch on July 30, as a beta test version, and it was officially launched on Aug. 22, only two weeks ago.”
New or not, Biden’s critics are already formulating plans to stop the plan in its tracks.
On the same day as the press call, a group of Senate Republicans led by Sen. Bill Cassidy (R-LA) introduced a Congressional Review Act resolution that would repeal the program.
Their chief concern is that the plan would mean many or even most borrowers would never repay the principal on their loan, citing a cost to taxpayers of as much as $559 billion. They also say it does nothing to address the rising costs of college and that universities would be incentivized to raise costs further given that many borrowers would expect to have their loans written off.
“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,” Cassidy said. “Our resolution protects the 87% of Americans who don’t have student debt and will be forced to shoulder the burden of the president’s irresponsible and unfair policy.”
The battle lines are similar to those drawn over Biden’s $400 billion student loan forgiveness program, which was announced in August 2022 and ultimately struck down by the Supreme Court in June. Republicans strongly opposed the move, owing to its cost and the potential for increased future borrowing.
An application for that program was also launched before challenges could be heard, with millions signing up but never seeing a benefit.
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The Biden administration is pressing ahead with its latest program and says it has involved partners such as the NAACP, the National Urban League, the Student Debt Crisis Center, and Young Invincibles.
“All of us are committed to fixing our broken student loan system,” Kvaal said. ”We’ve forgiven more student debt than any administration ever.”