Senate Republicans roll out proposal to reshape higher ed loan system

Higher Ed Dive

Laura Spitalniak

June 15, 2023

Dive Brief:

• Senate Republicans introduced a legislative proposal Wednesday that would dramatically reshape the student loan system and impose new accountability measures on colleges.

• Comprised of five separate bills, the Lowering Education Costs and Debt Act would standardize financial aid offers so students could more easily compare colleges, require students applying for loans to participate annually in borrower counseling, and cut down the number of repayment plans for federal student loans.

• The proposal would also put limits on graduate borrowing, in an effort to pressure graduate programs to lower their costs. And it would ban students from taking out loans for postsecondary programs that have not been shown to increase graduates’ earning potential.

Dive Insight:

The Lowering Education Costs and Debt Act comes just as the U.S. Supreme Court is expected to rule on President Joe Biden’s student loan forgiveness program.

Biden’s proposal would forgive up to $20,000 in student loan debt for individuals who earn up to $125,000 annually. One nonpartisan government agency projected in September the program would cost about $400 billion over the next three decades.

South Carolina Sen. Tim Scott, co-sponsor of the Republican proposal, decried Biden’s plan as an “illegal and unconstitutional student loan scheme” in a news release Wednesday.

Scott and four other Republican legislators, led by Louisiana Sen. Bill Cassidy, released their legislative package as an alternative to Biden’s plan for addressing student loan debt.

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