August 5, 2022
As the Biden administration inches closer to a final decision on whether to erase billions in student loan debt, House Republicans have introduced an alternative proposal.
The bill would reform certain aspects of the federal student loan system, including simplifying repayment methods, decreasing the impact of interest and establishing new borrowing limits. Republicans have long argued that President Biden does not have the authority to enact sweeping student loan cancellation, and that debt cancellation would do little to reform the system that places students in debt in the first place.
It would also allow Pell Grants to be used for short-term programs, like technical training and workforce development.
The bill comes as a government watchdog, the Government Accountability Office, released a report last week that said the federal student loan system has cost the federal government billions of dollars instead of bringing in revenue, as the current administration has argued. Republicans believe Biden’s campaign promise to enact mass cancellation of student loan debt would continue to drive costs, and the student loan program should be reformed at large.
The Responsible Education Assistance through Loan Reforms (REAL) Act is unlikely to gain support in the Democratic-controlled House of Representatives, especially because it would prohibit the Biden administration from issuing new regulations on student loans if they would increase costs to the federal government, including mass debt relief.
The bill has also received pushback from some who argue that it would make the student debt crisis worse instead of reforming it. Sameer Gadkaree, president of the Institute for College Access and Success, said in a statement, “This proposal would exacerbate the college affordability crisis and directly harm millions of current and future students. It would make student loans more expensive, restrict educational access for students from low-income backgrounds, and expand federal funding to programs that provide poor return on investment.”