Student Loan Update: Biden Plan Dealt a New Blow

President Joe Biden's student loan relief plan is facing another potential setback.

Senate Republicans introduced a Congressional Review Act (CRA) resolution to overturn Biden's Saving on a Valuable Education (SAVE) plan on Tuesday, calling the income-driven repayment (IDR) plan "reckless" for costing taxpayers as much as $559 billion over 10 years, according to a report from the Penn Wharton Budget Model. The report put the conservative estimate of the plan at $391 billion.

"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," Senator Bill Cassidy said in a press release. "Our resolution protects the 87 percent of Americans who don't have student debt and will be forced to shoulder the burden of the President's irresponsible and unfair policy."

Biden's SAVE repayment plan, which is estimated to benefit over 20 million Americans, aims to help borrowers cut their payments in half by reducing the discretionary income cap from 10 percent to 5 percent, with some borrowers having their balances zeroed out entirely.

The IDR plan was finalized in the wake of the Supreme Court's decision to strike down the Biden administration's plan to forgive up to $10,000 in student loans per borrower and $20,000 for Pell Grant recipients.

Newsweek reached out to the White House via email for comment.

"It's incredibly unfair to those who never incurred student debt because they didn't attend college in the first place or because they either worked their way through school or their family pinched pennies and planned for higher education," Senator John Thune said in the release. "I'm proud to join my colleagues in introducing this resolution that would overturn President Biden's latest misguided and fiscally irresponsible student loan bailout."

Because loan balances will be forgiven to those who repay their loans after a certain number of years under Biden's plan, and because that debt will not accrue interest if payments are met, borrowers with $0 monthly payments could eventually have their entire debts forgiven if they don't make enough income to raise their monthly payments above $0. Borrowers making less than $30,000 will qualify for $0 monthly payments until they make above the income requirement.

Interest on student loans began accruing again on Friday after a more-than-three-year-long pause on student loan payments. Since the beginning of the pandemic, there has been a moratorium on the monthly payments to help students amid the economic fallout caused by COVID. Borrowers are expected to receive their first loan bill in years on October 1.

Although Senate Republicans have introduced a CRA, it's unclear if Senate Leader Chuck Schumer will bring the resolution to a vote. Schumer, despite his support for the president's student loan relief efforts, did allow a vote on the initial measure to override Biden's original forgiveness plan earlier this year before the Supreme Court made its decision. That CRA was vetoed by Biden.

It's not only Republicans who have pushed back on Biden's proposals. Some Democrats in more moderate districts have criticized the president's plans to forgive student loans. Former Representative Tim Ryan broke from his party to oppose Biden's forgiveness plan during his Senate campaign in Ohio last year, as did congressional candidate Adam Frisch when he ran to unseat Republican Representative Lauren Boebert in Colorado.

The Education Department estimates that the Biden administration has canceled more than $116 billion in student loans for 3.4 million Americans as of August.