The hearing was held as part of ongoing student loan discussions in D.C. and as the industry awaits a U.S. Supreme Court decision on two cases on student loan forgiveness.
06/01/2023 2:10 P.M.
2 minute read
The Biden administration’s student loan policies were front and center at a House Subcommittee on Higher Education and Workforce Development hearing May 24, “Breaking the System Part II: Examining the Implications of Biden’s Student Loan Policies for Students and Taxpayers.”
James Kvaal, undersecretary of education at the U.S. Department of Education, and Richard Cordray, COO at the U.S. Department of Education Office of Federal Student Aid, testified before the subcommittee.
Investments and guidance related to higher education, student loan forgiveness and Pell Grants as well as interest rate policies were key points discussed between lawmakers and the Department of Education (DOE) representatives.
In August 2022, President Joe Biden announced a three-part plan on student loan relief that would provide up to $20,000 in debt cancellation for Pell Grant recipients with loans through the DOE and up to $10,000 for non-Pell Grant recipients, according to a fact sheet from the White House.
It would also cut monthly payments in half for undergraduate loans through proposed new income-driven repayment plans. The plans would protect more low-income borrowers from making any payments and cap monthly payments for undergraduate loans at 5% of a borrower’s discretionary income.
The plans announced last year also included an extension of the pause on student loan payments.
The DOE has said loan payments would resume as scheduled this fall.
The date was also cemented by the debt ceiling bill approved in the House on Wednesday, The Hill reports, although it still needs to pass the Democrat-controlled Senate.
At the House subcommittee hearing, Ranking Member U.S. Rep. Frederica S. Wilson, D-Fla., asked the DOE witnesses how important the targeted federal relief programs are for borrowers, including one-time debt relief and income-driven repayment plans.
Kvaal said that the relief offered to borrowers will strengthen the economy, help people go to college, and benefit borrowers and their communities.
It’s expected the subcommittee will continue to meet on the Biden administration’s student loan policies.
The U.S. Supreme Court is also set to rule soon on two cases that aim to halt the Biden administration’s plan to forgive up to $20,000 in federal student loans for borrowers, ACA International previously reported.