[House Report 118-253]
[From the U.S. Government Publishing Office]


 118th Congress    }                                     {    Report
                         HOUSE OF REPRESENTATIVES
  1st Session      }                                     {    118-253

======================================================================

 
  PROVIDING FOR CONGRESSIONAL DISAPPROVAL UNDER CHAPTER 8 OF TITLE 5, 
    UNITED STATES CODE, OF THE RULE SUBMITTED BY THE DEPARTMENT OF 
   EDUCATION RELATING TO ``IMPROVING INCOME DRIVEN REPAYMENT FOR THE 
  WILLIAM D. FORD FEDERAL DIRECT LOAN PROGRAM AND THE FEDERAL FAMILY 
                    EDUCATION LOAN (FFEL) PROGRAM''

                                _______
                                

October 25, 2023.--Committed to the Committee of the Whole House on the 
              State of the Union and ordered to be printed

                                _______
                                

     Ms. Foxx, from the Committee on Education and the Workforce,
                     submitted the following
                     
                              R E P O R T

                             together with

                             MINORITY VIEWS

                      [To accompany H.J. Res. 88]

      [Including cost estimate of the Congressional Budget Office]

    The Committee on Education and the Workforce, to whom was 
referred the joint resolution (H.J. Res. 88) providing for 
congressional disapproval under chapter 8 of title 5, United 
States Code, of the rule submitted by the Department of 
Education relating to ``Improving Income Driven Repayment for 
the William D. Ford Federal Direct Loan Program and the Federal 
Family Education Loan (FFEL) Program'', having considered the 
same, reports favorably thereon without amendment and 
recommends that the joint resolution do pass.

                                PURPOSE

    The purpose of H.J. Res 88 is to disapprove of the rule 
related to ``Improving Income Driven Repayment for the William 
D. Ford Federal Direct Loan Program and the Federal Family 
Education Loan (FFEL) Program'' that was first announced on 
August 24, 2022, and published as a final regulation in the 
Federal Register on July 10, 2023.





49-006






                            COMMITTEE ACTION

                             117TH CONGRESS

First Session--Hearings

    On April 28, 2021, the Committee on Education and Labor 
held a hearing on ``Building Back Better: Investing in 
Improving Schools, Creating Jobs, and Strengthening Families 
and our Economy.'' The purpose of the hearing was to examine 
the Biden administration's American Jobs Plan and American 
Families Plan, which included discussions about the federal 
student loan program and its impact on college affordability. 
Testifying before the Committee were Dr. Neal McCluskey, 
Director, Center for Educational Freedom, CATO Institute, 
Washington, D.C.; Mr. Brian Riedl, Senior Fellow, Manhattan 
Institute, Washington, D.C.; Mr. Mark Mitsui, President, 
Portland Community College, Portland, Oregon; Mr. Rasheed 
Malik, Senior Policy Analyst, Early Childhood Policy, Center 
for American Progress, Washington, D.C.; and Ms. Mary Filardo, 
Founder and Executive Director, 21st Century School Fund, 
Washington, D.C.
    On September 30, 2021, the Committee's Higher Education and 
Workforce Investment Subcommittee held a hearing on 
``Protecting Students and Taxpayers: Improving the Closed 
School Discharge Process.'' The purpose of the hearing was to 
learn about improvements to the process for discharging loans 
for federal student loan borrowers whose school abruptly 
closes. Testifying before the Subcommittee was Ms. Robyn Smith, 
Senior Attorney, Legal Aid Foundation of Los Angeles, Los 
Angeles, CA; Ms. Melissa Emrey-Arras, Director of Education, 
Workforce and Income Security, Governmental Accountability 
Office, Washington, D.C.; Mr. Preston Cooper, Research Fellow, 
Foundation for Research on Equal Opportunity, Washington D.C.; 
and Ms. Karyn Rhodes, Student Borrower, American Business 
Institute, Torrance, CA.
    On October 26, 2021, the Committee's Higher Education and 
Workforce Investment Subcommittee held a hearing on ``Examining 
the Policies and Priorities of the Office of Federal Student 
Aid.'' The purpose of the hearing was to hear from the Chief 
Operating Officer of Federal Student Aid about the policies and 
priorities of the agency. Testimony was received regarding 
student loan debt forgiveness and pauses to borrowers' 
obligations to pay their debt. Testifying before the Committee 
was Mr. Richard Cordray, Chief Operating Officer, Office of 
Federal Student Aid, Washington, D.C.
    On November 17, 2021, the Committee's the Committee's 
Subcommittees on Early Childhood, Elementary, and Secondary 
Education and Higher Education and Workforce Investment held a 
joint hearing on ``Examining the Implementation of COVID-19 
Education Funds.'' The purpose of the hearing was to conduct 
oversight of the Education Stabilization Fund (ESF), though 
oversight of the administration's actions related to the 
federal student loan program were discussed. Testifying before 
the subcommittee were The Honorable Cindy Marten, Deputy 
Secretary, U.S. Department of Education (ED), Washington, D.C. 
and The Honorable James Kvaal, Under Secretary, ED, Washington, 
D.C.

Second Session--Hearings

    On May 26, 2022, the Committee on Education and the 
Workforce held a hearing on ``Examining the Policies and 
Priorities of the U.S. Department of Education.'' The purpose 
of the hearing was to review the Fiscal Year 2023 budget 
priorities of the U.S. Department of Education. The hearing 
included discussion of the federal student loan programs. 
Testifying before the Committee was The Honorable Miguel 
Cardona, Secretary, ED, Washington, D.C.
    On July 19, 2022, the Committee's Higher Education and 
Workforce Investment Subcommittee held a hearing on ``The 
History and Continued Contributions of Tribal Colleges and 
Universities.'' Testimony was received regarding student loan 
debt forgiveness and solutions to improve the federal student 
loan program. Testifying before the Committee was Dr. Sandra 
Boham, President, Salish Kootenai College, Pablo, MT; Ms. 
Carrie Billy, President and CEO, American Indian Higher 
Education Consortium, Alexandria, VA; Dr. Beth Akers, Senior 
Fellow, American Enterprise Institute, Washington D.C.; and Dr. 
Cynthia Lindquist, President, Cankdeska Cikana Community 
College, Fort Totten, ND.

                             118TH CONGRESS

First Session--Hearings

    On February 8, 2023, the Committee on Education and the 
Workforce held a hearing on ``American Education in Crisis.'' 
The purpose of the hearing was to examine the state of 
education, including higher education and the status of pauses 
in federal student loan programs in the United States. 
Testifying before the Committee were Ms. Virginia Gentles, 
Director, Education Freedom Center, Independent Women's Forum, 
Arlington, VA; Dr. Monty Sullivan, President, Louisiana 
Community and Technical College System, Baton Rouge, LA; The 
Honorable Jared Polis, Governor, State of Colorado, Denver, CO; 
and Mr. Scott Pulsipher, President, Western Governors 
University, Salt Lake City, UT.
    On March 23, 2023, the Committee's Higher Education and 
Workforce Development Subcommittee held a hearing on ``Breaking 
the System: Examining the Implications of Biden's Student Loan 
Policies for Student's and Taxpayers.'' The purpose of the 
hearing was to discuss with policy experts the harms of the 
Biden administration's loan cancellation policies for students, 
taxpayers, and the economy. Testifying before the Subcommittee 
were Mr. Marc Goldwein, Senior Vice President and Senior Policy 
Director, Committee for a Responsible Federal Budget, 
Washington, D.C.; Dr. Adam Looney, Director, Marriner S. Eccles 
Institute for Economics and Quantitative Analysis, University 
of Utah, Salt Lake City, UT; Mr. Sameer Gadkaree, President, 
the Institute for College Access & Success, Los Angeles, CA; 
and Dr. Carlo Salerno, Economist and Financial Aid Expert, Los 
Angeles, CA.
    On May 24, 2023, the Committee's Higher Education and 
Workforce Development Subcommittee held a hearing on ``Breaking 
the System Part II: Examining the Implications of Biden's 
Student Loan Policies for Student's and Taxpayers.'' The 
purpose of the hearing was to conduct oversight of the Biden 
administration's student loan policies. Testifying before the 
subcommittee were Mr. James Kvaal, Under Secretary of 
Education, DOL, Washington, D.C. and Mr. Richard Cordray, Chief 
Operating Officer, Office of Federal Student Aid, DOL, 
Washington, D.C.
    On July 27, 2023, the Committee's Higher Education and 
Workforce Development Subcommittee held a hearing on ``Lowering 
Costs and Increasing Value for Students, Institutions, and 
Taxpayers.'' The purpose of the hearing was to discuss with 
policy experts the root causes of student debt and how to fix 
structural cost problems with accountability. Testifying before 
the Subcommittee were Mr. Michael B. Horn, Author and Co-
Founder of the Clayton Christensen Institute for Disruptive 
Innovation, Lexington, MA; Mr. Stig Leschly, President and 
Founder, Postsecondary Commission, Boston, MA; Dr. Stephanie 
Cellini, Professor of Public Policy and Public Administration, 
and of Economics, George Washington University, Washington, 
D.C.; and Dr. Andrew Gillen, Senior Policy Analyst, Texas 
Public Policy Foundation, Austin, TX.

Legislative Action

    On May 10, 2023, the Committee considered H.J. Res. 45 in 
legislative session and reported it favorably to the House of 
Representatives by a recorded vote of 24-18. On May 24, 2023, 
the full House considered H.J. Res. 45 on the floor and passed 
it by a recorded vote of 218-203. On June 1, 2023, the Senate 
passed H.J. Res. 45 on the floor and passed it by a vote of 52-
46. On June 7, 2023, it was presented to and vetoed by 
President Biden. On June 21, 2023, the House failed to override 
the veto by a vote of 221-206.
    On September 5, 2023, Rep. Lisa McClain introduced H.J. 
Res. 88, Providing for congressional disapproval under chapter 
8 of title 5, United States Code, of the rule submitted by the 
Department of Education relating to ``Improving Income Driven 
Repayment for the William D. Ford Federal Direct Loan Program 
and the Federal Family Education Loan (FFEL) Program.'' The 
bill was referred to the Committee on Education and the 
Workforce. On September 14, 2023, the Committee considered H.J. 
Res. 88 in legislative session and reported it favorably, as 
amended, to the House of Representatives by a recorded vote of 
23 to 19.

                            COMMITTEE VIEWS

                              INTRODUCTION

    Since taking office, the Biden administration has attempted 
to ram its radical free college agenda through the backdoor by 
transferring hundreds of billions of dollars in federal student 
loan debt to taxpayers.\1\ Through expansive new regulations, 
continuous extensions of the now three and a half year long 
repayment pause, and attempted blanket cancellation, taxpayers 
may ultimately spend nearly $1 trillion discharging loans since 
the repayment moratorium first began in March 2020--more than 
the federal government has spent on postsecondary education in 
our nation's history.\2\ However, no action has greater 
implications for students, taxpayers, and our education system 
than the Biden administration's radical, sweeping changes to 
income-driven repayment (IDR) that will effectively provide de 
facto ``free'' college through the federal student loan 
program.
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    \1\ https://www.aei.org/studentdebtforgivenesstracker/
    \2\ https://edworkforce.house.gov/uploadedfiles/
3.23.23_goldwein_testimony.pdf
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                             IDR BACKGROUND

    IDR plans are a subset of federal student loan repayment 
plans that cap a borrower's monthly payment at a percentage of 
his or her discretionary income. Discretionary income is 
defined as a portion of a borrower's adjusted gross income 
(AGI) that exceeds a specified multiple of the federal poverty 
line (FPL) for the borrower's family size. While in an IDR 
plan, a situation may arise in which a borrower's monthly 
payment can be less than the interest that accrues in a given 
month, and this accumulation of unpaid interest may lead to an 
increase in the borrower's loan balance. Any loan balance that 
remains outstanding after the borrower has made qualifying 
payments according to an IDR plan for a maximum repayment 
period is forgiven. Today, there are five IDR plans available 
to borrowers.

History

    In 1993, legislation was passed granting ED the authority 
to create the original IDR option--the income-contingent 
repayment (ICR) program. The legislation gave ED total 
discretion to set the amount borrowers would be required to pay 
monthly. The only major restriction was that borrowers must 
have their debts forgiven no later than 25 years after entering 
the program. Under the original terms of ICR, borrowers were 
required to pay 20 percent of their incomes above the FPL and 
would have debts forgiven after 25 years; as a result, only 
borrowers with very low incomes would qualify for reduced 
payments or loan cancellation. Likely due to the program's 
complexity, limited eligibility, relatively high expected 
payments, and lack of awareness of the program, enrollment in 
ICR was minimal, with only 9 percent of Direct Loan borrowers 
enrolled in the late 1990s.\3\
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    \3\ https://www.gao.gov/assets/hehs-97 155.pdf
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Income-Based Repayment

    The Income-Based Repayment (IBR) program was established in 
2007 in response to rising student debt burdens and concerns 
that ICR should better protect borrowers from unaffordable 
payments. IBR increased the generosity of the repayment terms 
provided to borrowers by redefining discretionary income as AGI 
that exceeds 150 percent of FPL and lowered the assessment rate 
to 15 percent. The loan cancellation term remained at 25 years 
for all borrowers. However, Congress then created the Public 
Service Loan Forgiveness (PSLF) program, a new 10-year loan 
cancellation benefit for borrowers employed in public service 
occupations. In 2010, shortly after IBR became available, the 
Obama administration proposed reducing payments in the program 
to 10 percent of income above the exemption and shortening the 
loan cancelation time to 20 years. Congress quickly enacted 
these changes in early 2010 but limited them to new student 
loan borrowers in 2014 and thereafter.

Obama Administration Expansions

    IDR was greatly expanded under the Obama administration. In 
addition to lowering the assessment rate to 10 percent of 
discretionary income under IBR, the administration designed two 
new plans: the Pay As You Earn (PAYE) plan and the Revised Pay 
As You Earn (REPAYE) plan. The PAYE plan was designed in 2012 
as a workaround to the restrictions on IBR for new borrowers 
put in place by Congress and used the authority provided by the 
original 1993 legislation creating ICR. The repayment terms 
under PAYE match those under IBR for borrowers who took out 
loans after 2007. The Obama administration repeated this 
process a few years later to create the REPAYE plan, which 
provided the new IBR terms to all borrowers regardless of when 
they took out their loans. However, under REPAYE, borrowers 
with debt from graduate school qualify for loan cancelation 
after 25 years of payments, not 20. Additionally, for all 
borrowers in REPAYE, if monthly payments are not high enough to 
cover accruing interest, half the unpaid amount is immediately 
canceled.

Trends and Statistics \4\
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    \4\ https://www.urban.org/sites/default/files/2022-04/Income-
Driven%20Repayment%20of%20
Student%20Loans.pdf.
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    Enrollment in IDR has grown rapidly following the 
introduction of more generous plans under the Obama 
administration.\5\ In 2013, 1.6 million borrowers were repaying 
$72 billion in loans through an IDR plan, with an average 
balance of $45,759, more than double the average balance of 
borrowers in non-IDR plans ($20,381). By 2021, IDR enrollment 
had increased to 8.3 million borrowers with $515 billion of 
debt, with the average balance reaching $62,123. IDR enrollment 
growth has greatly outpaced the increase in total outstanding 
federal student loans and now accounts for about half of 
outstanding debt. In 2015, 18 percent of borrowers were 
repaying 34 percent of all Direct Loan balances in IDR plans. 
By 2021, those figures had increased to 32 percent of borrowers 
repaying 54 percent of all Direct Loan balances. This increase 
in participation is also the main contributor to the cost of 
the Direct Loan program, which, according to the Government 
Accountability Office (GAO), has cost taxpayers $200 billion 
since its inception.\6\
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    \5\ https://research.collegeboard.org/pdf/trends-college-pricing-
student-aid-2020.pdf.
    \6\ https://www.gao.gov/products/gao-22 105365.
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  BIDEN ADMINISTRATION: THE SAVING ON A VALUABLE EDUCATION (SAVE) PLAN

    On January 10, 2023, the Biden administration announced its 
proposed regulation to modify the REPAYE plan.\7\ The final 
regulation, which the Department dubbed the IDR option the 
``Saving on A Valuable Education Plan,'' or the SAVE plan, was 
published July 10 and is set to take effect July 1, 2024.\8\ 
However, the Department announced it is using executive 
authority to early implement the majority of these changes when 
repayment resumes in October.\9\ The new plan is substantially 
more generous than existing IDR plans. Undergraduate borrowers 
will pay 5 percent of any income (down from the current 10 
percent) they earn in excess of 225 percent of the poverty line 
(up from 150 percent). If payments are insufficient to cover 
monthly interest, the government will cancel the remaining 
interest so balances do not increase. Any remaining loans will 
be forgiven after 20 or 25 years, or 10 years under the PSLF 
program and for borrowers with lower balances.
---------------------------------------------------------------------------
    \7\ https://www.ed.gov/news/press-releases/new-proposed-
regulations-would-transform-income-driven-repayment-cutting-
undergraduate-loan-payments-half-and-preventing-unpaid-interest-
accumulation.
    \8\ https://www.federalregister.gov/documents/2023/07/10/2023-
13112/improving-income-driven-repayment-for-the-william-d-ford-federal-
direct-loan-program-and-the-federal.
    \9\ https://www.nasfaa.org/news-item/31149/
ED_Releases_Final_Rule_on_Latest_Income-Driven_Repayment_Plan.
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Implications for Students and Taxpayers

    The Biden administration's IDR changes will be far more 
consequential for students and taxpayers than the 
administration's one-time student loan bailout. Indeed, 
previous estimates by CBO found that the Biden administration 
plan would cost $276 billion over the next decade; \10\ other 
experts like the Penn Wharton Budget Model project the cost to 
be as high as $559 billion.\11\ Regardless of the accounting 
method, the Biden administration's SAVE plan will more than 
double the cost of IDR and is the most expensive regulation in 
history. As Figure 1 illustrates, the Biden administration plan 
alone will cost at least an additional $15.4 billion per year 
over the next decade.
---------------------------------------------------------------------------
    \10\ https://www.cbo.gov/system/files/2023 03/58983-IDR.pdf.
    \11\ https://budgetmodel.wharton.upenn.edu/issues/2023/7/17/biden-
income-driven-repayment-budget-update. 

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A Backdoor Path to ``Free'' College

    IDR has always served as a taxpayer-funded safety net for 
borrowers struggling under excessive debt burdens and poor 
outcomes and, while the program has become an increasingly 
larger expense for taxpayers, the underlying assumption has 
always been that most loans would be repaid. Indeed, as 
recently as 2017, CBO projected that student loan borrowers 
would, on average, repay close to $1.11 per dollar 
borrowed.\12\ However, under the SAVE plan, repaying loans will 
be the exception rather than the norm.
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    \12\ https://edworkforce.house.gov/uploadedfiles/
3.23.23_looney_testimony.pdf.

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    As Figure 2 illustrates, just 22 percent of students 
obtaining a bachelor's degree will ever fully repay their loans 
and 50 percent will pay less than half or nothing at all.\13\ 
Even fewer shares of associates and certificate degree holders 
will ever repay. Simply put, the Biden administration couldn't 
get its radical ``free'' college agenda through Congress so it 
is being done through the loan program by executive fiat. 
Indeed, consider the following facts:
---------------------------------------------------------------------------
    \13\ https://www.urban.org/sites/default/files/2023-01/Few-
percent20College-percent20Students percent20Will-percent20Repay-
percent20Student-percent20Loans-percent20under-percent20the 
percent20Biden-percent20Administrations-percent20Proposal.pdf.
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         Loan cancelation for undergraduate borrowers 
        will exceed the amount they receive in Pell grants.\14\
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    \14\ Ibid.
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         The cost of the Biden administration's IDR 
        plan (as estimated by CBO) is three times the cost of 
        the President's free community college proposal.\15\
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    \15\ https://edworkforce.house.gov/uploadedfiles/
3.23.23_goldwein_testimony.pdf.
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Tuition Inflation

    There is substantial evidence that institutions increase 
their prices and/or displace their own financial support 
because of generous federal subsidies. For example, economists 
at the New York Federal Reserve found that for every $1 
increase in loan subsidies, institutions of higher education 
(IHEs) capture 60 cents on the dollar through increases in 
tuition.\16\ This problem is excessive at the graduate level, 
where such students make up only a quarter of all borrowers but 
hold half of all student loan debt. Because there are no 
borrowing limits in the Grad PLUS loan program, schools are 
able to easily increase their prices to capture additional 
revenue because it is taxpayers, not students, who ultimately 
bear the cost.\17\
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    \16\ https://www.newyorkfed.org/medialibrary/media/research/
staff_reports/sr733.pdf.
    \17\ https://lesleyjturner.com/GradPLUS_Feb2023.pdf.
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    Importantly, there is virtually no accountability for IHEs 
when it comes to the cost of their degree programs, student 
outcomes, or borrowers' inability to repay their loans. Because 
there are few consequences for institutions that charge high 
prices for low-value degrees, research has shown there are 
thousands of programs that leave students worse off than if 
they had not enrolled in the first place--including over a 
quarter of bachelor degree programs and approximately 40 
percent of master's degree programs.\18\ Because of this, IDR 
plans were expected to cost taxpayers at least $200 billion 
over the next decade even before President Biden took office. 
Though schools can lose access to student aid dollars if they 
have a large share of borrowers who default on their loans 
(e.g., 30-40 percent), few schools have been subject to such 
consequences, and the repayment pause has made this 
accountability tool obsolete for several years. However, the 
SAVE plan will make this absence of accountability permanent 
and will result in the lowest-quality programs receiving the 
greatest taxpayer subsidies.
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    \18\ https://freopp.org/roi/home.
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Increased Borrowing

    Almost all undergraduate and graduate students will be 
eligible for reduced payments and eventual cancellation under 
the proposal. Moreover, the amounts borrowers save (and 
eventually have canceled) are based largely on the amounts 
students borrow, which means the benefits are uncapped and 
disproportionately flow to borrowers with the largest loans, 
who are more likely to be graduate students and students who 
attended more expensive programs. For instance, under the 
current system, a doctor earning the median salary for 
physicians who works for a public or private nonprofit employer 
will pay $92,700 toward his loans for the first 10 years of his 
employment before the remainder is discharged under PSLF. 
However, under the Department's proposed changes to REPAYE, the 
doctor's total payments during the first 10 years will drop to 
$82,500--a savings of over $10,000--despite the fact that the 
doctor will go on to earn $280,000 annually over his or her 
lifetime.\19\ As a result, even students who do not currently 
borrow at all or borrow smaller amounts, such as community 
college students, will have a strong incentive to take on as 
much debt as they can because there is no marginal cost to them 
for doing so (see Figure 3).
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    \19\ file:///C:/Users/CRussell/Downloads/ED-2023-OPE-0004-
7963_attachment_1.pdf.

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    These perverse incentives also mean there is a high 
potential for abuse. Importantly, a large share of student debt 
is not used to pay tuition, but rather to provide students cash 
for rent, food, and other expenses. While students certainly 
need to pay rent and buy food while in school, under the SAVE 
plan a student can borrow significant amounts for ``living 
expenses,'' deposit the check in a bank account, and pay back a 
fraction of what they owe taxpayers, effectively turning the 
student loan program into an ATM. For example, at many graduate 
programs, a single graduate student living alone will be able 
to borrow more than $20,000 per year just for living expenses 
and never pay back a penny; that is double what a low-income 
single mother with two children can expect to get from the 
Earned Income Tax Credit (EITC) and food stamps combined.\20\ 
These factors, among others, explain why CBO estimates that 
undergraduate and graduate borrowing will increase by 15 
percent and 12 percent, respectively, or roughly $10 billion 
per year.\21\
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    \20\ https://www.brookings.edu/articles/bidens-income-driven-
repayment-plan-would-turn-student-loans-into-untargeted-grants/.
    \21\ https://www.cbo.gov/system/files/2023-03/58983-IDR.pdf.
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Fails to Address the Real Problems

    Most ironically, the SAVE plan fails to address the 
greatest issue facing federal student loan borrowers in IDR, 
that is, the failure to make progress toward paying down their 
loans' principal. Growing balances resulting from interest-only 
payments is one of the most frequently cited issues with the 
loan program by media outlets, policymakers, and borrowers 
alike.\22\ In fact, as Figure 4 shows, three quarters of 
borrowers currently enrolled in IDR owe more than they 
initially borrowed five years after entering repayment.\23\
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    \22\ https://www.pewtrusts.org/en/research-and-analysis/reports/
2020/05/borrowers-discuss-the-challenges-of-student-loan-repayment.
    \23\ https://www.cbo.gov/system/files/2020-02/55968-CBO-
IDRP.pdf#page=21.

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    Many borrowers complain of making payments year after year, 
yet never see their balances drop; the promise of future 
cancellation is cold comfort to people watching interest 
charges rack up. But the exceedingly low payments under the 
SAVE plan will be insufficient to cover interest for millions 
of borrowers. While the government will cancel unpaid interest 
every month, these borrowers still will not make a dent in the 
principal. Indeed, under the Biden administration plan, 
millions of borrowers will make payments year after year, yet 
never see their balance drop by a single penny. Higher balances 
will remain a psychological burden for borrowers, and slower 
repayment rates also will quickly raise aggregate student debt, 
feeding the ``student loan crisis'' narrative and intensifying 
political pressure for further rounds of loan cancellation.

                               CONCLUSION

    The consequences of the administration's radical IDR plan 
cannot be overstated. Far from saving students from burdensome 
loans, it will lead colleges and universities to increase their 
prices, students to borrow excessively for degrees with little 
value, and taxpayers to cover all or most of the cost of 
postsecondary education for the vast majority of Americans.

                      SECTION-BY-SECTION ANALYSIS

    H.J. Resolution 88 resolves that Congress disapproves of 
the rule related to ``Improving Income Driven Repayment for the 
William D. Ford Federal Direct Loan Program and the Federal 
Family Education Loan (FFEL) Program,'' which was first 
announced on August 24, 2022, and published as a final rule in 
the Federal Register on July 10, 2023.

                       EXPLANATION OF AMENDMENTS

    No amendments to the resolution were adopted.

              APPLICATION OF LAW TO THE LEGISLATIVE BRANCH

    Section 102(b)(3) of Public Law 104-1 requires a 
description of the application of this bill to the legislative 
branch. H.J. Res. 88 takes an important step towards reigning 
in executive overreach and preventing the Department of 
Education from unilaterally transferring federal student loan 
debt to taxpayers.

                       UNFUNDED MANDATE STATEMENT

    Pursuant to Section 423 of the Congressional Budget and 
Impoundment Control Act of 1974, Pub. L. No. 93-344 (as amended 
by Section 101(a)(2) of the Unfunded Mandates Reform Act of 
1995, Pub. L. No. 104-4), the Committee traditionally adopts as 
its own the cost estimate prepared by the Director of the 
Congressional Budget Office (CBO) pursuant to section 402 of 
the Congressional Budget and Impoundment Control Act of 1974.

                           EARMARK STATEMENT

    H.J. Res. 88 does not contain any congressional earmarks, 
limited tax benefits, or limited tariff benefits as defined in 
clause 9 of rule XXI of the Rules of the House of 
Representatives.

                            ROLL CALL VOTES

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         STATEMENT OF GENERAL PERFORMANCE GOALS AND OBJECTIVES

    In accordance with clause (3)(c) of House rule XIII, the 
goal of H.J. Res. 88 is to reign in executive overreach and 
prevent the Department of Education from unilaterally 
transferring federal student loan debt to taxpayers.

                    DUPLICATION OF FEDERAL PROGRAMS

    No provision of H.J. Res. 88 establishes or reauthorizes a 
program of the Federal Government known to be duplicative of 
another Federal program, a program that was included in any 
report from the Government Accountability Office to Congress 
pursuant to section 21 of Public Law 111-139, or a program 
related to a program identified in the most recent Catalog of 
Federal Domestic Assistance.

  STATEMENT OF OVERSIGHT FINDINGS AND RECOMMENDATIONS OF THE COMMITTEE

    In compliance with clause 3(c)(1) of rule XIII and clause 
2(b)(1) of rule X of the Rules of the House of Representatives, 
the Committee's oversight findings and recommendations are 
reflected in the body of this report.

            REQUIRED COMMITTEE HEARING AND RELATED HEARINGS

    In compliance with clause 3(c)(6) of rule XIII of the Rules 
of the House of Representatives, the following hearings held 
during the 118th Congress was used to develop or consider H.J. 
Res. 88: ``Breaking the System: Examining the Implications of 
Biden's Student Loan Policies for Student's and Taxpayers 
(2023)''.
    The following related hearings were held: ``Building Back 
Better: Investing in Improving Schools, Creating Jobs, and 
Strengthening Families and our Economy (2021),'' ``Protecting 
Students and Taxpayers: Improving the Closed School Discharge 
Process (2021),'' ``Examining the Policies and Priorities of 
the Office of Federal Student Aid (2021),'' ``Examining the 
Implementation of COVID-19 Education Funds (2021),'' 
``Examining the Policies and Priorities of the U.S. Department 
of Education (2022),'' ``The History and continued 
Contributions of Tribal Colleges and Universities (2022),'' and 
``American Education in Crisis (2023),'' ``Breaking the System: 
Examining the Implications of Biden's Student Loan Policies for 
Student's and Taxpayers (2023),'' ``Breaking the System Part 
II: Examining the Implications of Biden's Student Loan Policies 
for Student's and Taxpayers (2023),'' and ``Lowering Costs and 
Increasing Value for Students, Institutions, and Taxpayers 
(2023).''

               NEW BUDGET AUTHORITY AND CBO COST ESTIMATE

    With respect to the requirements of clause 3(c)(2) of rule 
XIII of the Rules of the House of Representatives and section 
308(a) of the Congressional Budget Act of 1974 and with respect 
to requirements of clause 3(c)(3) of rule XIII of the Rules of 
the House of Representatives and section 402 of the 
Congressional Budget Act of 1974, the Committee has received 
the following estimate for H.J. Res. 88 from the Director of 
the Congressional Budget Office:

[GRAPHIC NOT AVAILABLE IN TIFF FORMAT]


    The resolution would:
           Repeal the income-driven repayment plan for 
        new and existing student loan borrowers created by the 
        final rule published by the Department of Education on 
        July 10, 2023, and prohibit the department from 
        creating a similar plan in the future.
    Estimated budgetary effects would mainly stem from:
           Increased future repayments of principal and 
        interest on student loans from repeal of the new 
        income-driven repayment plan (which on average reduces 
        payments for borrowers) thereby reducing the costs of 
        those loans.
    Areas of significant uncertainty include:
           Estimating the amount of payments from 
        borrowers with and without the income-driven repayment 
        plan.
           Estimating the enrollment of the new income 
        driven repayment plan versus other repayment options.
    Resolution summary: H.J. Res. 88 would disapprove the final 
rule relating to ``Improving Income Driven Repayment for the 
William D. Ford Federal Direct Loan Program and the Federal 
Family Education Loan (FFEL) Program'' issued by the Department 
of Education and published in the Federal Register on July 10, 
2023. (That rule created a new income-driven repayment plan 
called Saving on a Valuable Education, or SAVE.) The resolution 
would invoke a legislative process established by the 
Congressional Review Act, which would repeal the rule and 
prohibit the department from issuing the same or similar rules 
in the future.
    Estimated Federal cost: The costs of the legislation, 
detailed in Table 1, fall within budget function 500 
(education, training, employment, and social services).

                                                                Table 1.--ESTIMATED CHANGES IN DIRECT SPENDING UNDER H.J. RES. 88
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                       By fiscal year, billions of dollars--
                                                  ----------------------------------------------------------------------------------------------------------------------------------------------
                                                      2023       2024       2025       2026       2027       2028       2029       2030       2031       2032       2033    2023-2028  2023-2033
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                Decreases (-) in Direct Spending
 
Estimated Budget Authority.......................     -129.4      -11.8      -13.0      -14.1      -15.6      -15.6      -15.8      -15.8      -15.8      -16.1      -16.2     -199.5     -279.2
Estimated Outlays................................     -129.4      -10.3      -11.4      -12.4      -13.6      -13.7      -13.8      -13.9      -13.9      -14.0      -14.3     -190.8     -260.7
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

    Basis of estimate:
    For this estimate, CBO assumes that the resolution will be 
enacted before the end of fiscal year 2023. The estimate is 
relative to CBO's May 2023 baseline, which incorporates the 
final rule on the SAVE plan published on July 10, 2023.
    As required under the Federal Credit Reform Act of 1990 
(FCRA), most of the costs of the federal student loan program 
are estimated on a net-present-value basis. A present value is 
a single number that expresses a flow of current and future 
payments in terms of an equivalent lump sum received or paid 
today. Under FCRA, the present value of all loan-related cash 
flows is calculated by discounting those expected cash flows to 
the year of disbursement, using the rates for comparable 
maturities on Treasury borrowing. For changes to the cost of 
outstanding loans, the estimated costs or savings are shown in 
the year in which the legislation making those changes is 
enacted.
    For more information about how CBO estimated this proposal, 
see the letter transmitted on March 13, 2023.\1\
---------------------------------------------------------------------------
    \1\ See Congressional Budget Office, letter to the Honorable 
Virginia Foxx and the Honorable William Cassidy, concerning the costs 
of the proposed income-driven repayment plan for student loans (March 
13, 2023), www.cbo.gov/publication/58983.
---------------------------------------------------------------------------
    Background: The July rule created a new income-driven 
repayment (IDR) plan, called SAVE. In an IDR plan, monthly loan 
payments are based on the borrower's income and family size and 
the remaining loan balance is forgiven after a certain period 
of time in repayment, usually 20 or 25 years. The SAVE plan 
replaced the Revised Pay-As-You-Earn (REPAYE) repayment plan, 
one of several existing IDR plans available to borrowers.
    In comparison to the REPAYE plan and other IDR plans, the 
SAVE plan:
           Increases the amount of income exempted from 
        the calculation of monthly payments from 150 percent to 
        225 percent of the federal poverty guideline, which 
        varies by family size. Payment amounts are calculated 
        based on discretionary income, defined as income above 
        the exempted amount.
           Eliminates accrual of unpaid interest when a 
        borrower's payment does not cover the entire amount of 
        interest due. (The former REPAYE plan waived 50 percent 
        of that interest.)
    Beginning in July 2024, the SAVE plan also:
           Reduces from 10 percent to 5 percent the 
        amount of discretionary income that borrowers must pay 
        if they have undergraduate loans only. Borrowers with 
        only graduate loans would continue to pay 10 percent of 
        their discretionary income. Borrowers with 
        undergraduate and graduate loans would pay a percentage 
        of their discretionary income based on the weighted 
        average of their combined loan amounts.
           Allows student borrowers who initially 
        borrowed less than $22,000 to have their outstanding 
        balance forgiven after 10 to 20 years in repayment, 
        depending on the amount borrowed. (Undergraduate 
        borrowers with a balance above that amount would 
        receive forgiveness after 20 years in repayment; 
        graduate borrowers would receive forgiveness after 25 
        years, which is not a change from the old REPAYE plan.)
           Authorizes the Department of Education to 
        automatically enroll borrowers in an IDR plan if their 
        payments are 75 days delinquent and if they have 
        authorized disclosure of income and tax return 
        information to the department.
    Direct spending: CBO estimates that enacting H.J. Res. 88 
would reduce direct spending, on a net-present-value basis, by 
$129.4 billion in 2023, and by $260.7 billion over the 2023-
2033 period. CBO expects that, on average, borrowers who enroll 
in the SAVE plan will pay less in principal and interest than 
they would if that plan were no longer available. The estimated 
savings is the present value of the borrowers' projected 
payments of principal and interest on student loans before 
accounting for the repeal of that policy, minus the present 
value of payments after doing so. Under both scenarios, the 
present value is calculated by discounting the payments the 
government receives, using methods specified in FCRA.
    Outstanding loans: CBO estimates that borrowers will hold a 
total of $1.4 trillion in outstanding direct loans to students, 
excluding loans to parents, by the end of fiscal year 2023. If 
the SAVE plan were repealed, CBO expects that borrowers would 
make higher payments, on average, and that fewer borrowers 
would pay using income-driven repayment. Under current law and 
regulations, CBO estimates that about 60 percent of outstanding 
loan volume to students will be repaid in an IDR plan. If the 
SAVE plan were eliminated, the agency expects that the 
percentage of outstanding volume repaid in an IDR would drop to 
50 percent. In total, CBO estimates that enacting H.J. Res 88 
would increase future cash inflows from borrowers with 
outstanding loans by $129.4 billion on a net-present value 
basis, which is shown as a reduction in direct spending in 
2023.
    Loans originated in years 2024 through 2033: CBO projects 
that about $900 billion in new loans will be originated to 
students over the 2024-2033 period. CBO expects that more 
students will choose to take out loans, and more students will 
enroll in an income-driven repayment plan with the SAVE plan 
available than if it were eliminated. The share of loan volume 
originated to student borrowers who eventually enroll in any 
IDR plan would decrease from about 70 percent of volume to 
about 50 percent. That decrease would stem from two factors:
           Borrowers would be less likely to select an 
        IDR plan because the remaining plans would be less 
        generous than the SAVE Plan, and
           The department would no longer automatically 
        enroll borrowers who are 75 days delinquent into an IDR 
        plan.
    Further, CBO estimates that loan volume originated to 
students over the 2024 though 2033 period would decline by 
about 8 percent if the SAVE plan were to be eliminated, 
primarily because repayment options in the loan program would 
be less generous, on average, and because expected 
institutional responses to the availability of the plan would 
not occur.
    In total, CBO estimates that enacting H.J. Res. 88 would 
decrease the costs of future cohorts of loans by $131.3 billion 
on a net-present value basis.
    Sources of data: For this analysis, CBO used administrative 
data from the National Student Loan Data System for a 
representative sample of borrowers, along with survey data from 
the National Postsecondary Student Aid Study. We supplemented 
that information with other data as inputs to project 
borrowers' lifetime earnings and repayment of loans.\2\ CBO 
also consulted with a range of experts on postsecondary student 
aid and reviewed literature on postsecondary enrollment, 
tuition, and borrowing.
---------------------------------------------------------------------------
    \2\ For a technical description of CBO's modeling of income-driven 
repayment plans, see Nadia Karamcheva, Jeffrey Perry, and Constantine 
Yannelis, Income-Driven Repayment Plans for Student Loans, Working 
Paper 2020-02 (Congressional Budget Office, April 2020), www.cbo.gov/
publication/56337.
---------------------------------------------------------------------------
    Spending subject to appropriation: Additional funding to 
administer the student loan program is provided each year in 
appropriation acts. In fiscal year 2023, the Congress 
appropriated $2.0 billion for student aid administration, which 
is used to administer student loans and other student aid 
programs. CBO has not estimated the impact on the amount of 
funding that would be needed to administer the student loan 
program if H.J. Res 88 were enacted. Any change in spending 
would be subject to the availability of appropriated funds.
    Uncertainty: Although CBO has endeavored to develop an 
estimate of H.J. Res. 88 that is in the middle of the 
distribution of potential outcomes, those estimates are highly 
uncertain. In particular, it is difficult to anticipate the 
ways students and postsecondary institutions will respond to 
the availability of the plan. If more or fewer borrowers enroll 
in the SAVE plan or if additional borrowing grows by more or 
less than CBO projects, the costs could differ significantly 
from those presented here. The uncertainty is further 
complicated by difficulty in anticipating changes in the 
composition or characteristics of enrollees in the new IDR plan 
relative to those currently participating.
    Pay-As-You-Go considerations: The Statutory Pay-As-You-Go 
Act of 2010 establishes budget-reporting and enforcement 
procedures for legislation affecting direct spending or 
revenues. The net changes in outlays that are subject to those 
pay-as-you-go procedures are shown in Table 1.
    Increase in long-term net direct spending: None.
    Mandates: None.
    Previous CBO estimates: On March 13, 2023, CBO published a 
letter detailing the estimated budgetary effects of the 
proposed rule for the new IDR, as published by the Department 
of Education in the Federal Register on January 11, 2023. In 
that letter, CBO estimated that the new IDR plan would increase 
the cost of the federal student loan program by $276 billion 
over the 2023-2033 period, assuming the Supreme Court fully 
invalidated the Administration's plan to cancel outstanding 
debt. That estimate was relative to CBO's February 2023 
baseline projections.
    The estimate of the final rule reflects several changes 
from the estimate of the proposed rule. First, it has been 
updated to reflect the assumptions in CBO's May 2023 baseline, 
which projects less overall volume originated over the 2024-
2033 period than in the February 2023 baseline. The estimated 
cost of the new IDR plan is lower under the assumption that 
less volume will be originated in the future.
    In addition, this estimate incorporates the effects of the 
proposed rule relating to ``Financial Value Transparency and 
Gainful Employment (GE), Financial Responsibility, 
Administrative Capability, Certification Procedures, Ability to 
Benefit (ATB),'' as published by the Department of Education in 
the Federal Register on May 19, 2023. As standard practice, CBO 
incorporates 50 percent of the budgetary effects of proposed 
rules into its baseline and estimates. CBO expects that the 
proposed rule on gainful employment, which requires 
institutions to meet benchmarks for debt-to-earnings rates, 
will reduce some of the additional borrowing that would have 
otherwise occurred.
    Finally, it reflects small differences between the proposed 
and final rule. Under the final rule, several benefits of the 
SAVE plan, such as reduction in the amount of discretionary 
income that borrowers must pay if they have undergraduate loans 
only, do not start until July 2024. Under the proposed rule, 
those benefits were immediately available.
    Other estimates: In the final rule published on July 10, 
2023, the Department of Education estimated that the SAVE Plan 
will cost $156 billion over the 2023-2033 period. Of that 
total, the department estimates the cost for existing loan 
cohorts will total $70.9 billion, about $59 billion lower than 
CBO's estimate. Much of that difference stems from the fact 
that the department's estimate incorporates the costs of the 
Administration's plan to cancel up to $20,000 in outstanding 
balances for eligible borrowers. This assumption makes the 
estimated costs for outstanding loans much lower than if that 
assumption had not been included. The Supreme Court invalidated 
the loan cancellation plan on June 30, 2023.
    The department estimated an additional cost of $85.1 
billion for loan cohorts originated from 2024 to 2033, about 
$46 billion lower than CBO's estimate. Most of the difference 
between CBO's and the department's estimated costs for future 
loans stems from the fact that the department did not include 
any costs for increased borrowing among eligible students in 
the future.
    Estimate prepared by: Federal costs: Leah Koestner; 
Mandates: Erich Dvorak.
    Estimate reviewed by: Justin Humphrey, Chief, Finance, 
Housing, and Education Cost Estimates Unit; Kathleen 
Fitzgerald, Chief, Public and Private Mandates Unit; H. Samuel 
Papenfuss, Deputy Director of Budget Analysis.
    Estimate approved by: Phillip L. Swagel, Director, 
Congressional Budget Office.

                        COMMITTEE COST ESTIMATE

    Clause 3(d)(1) of rule XIII of the Rules of the House of 
Representatives requires an estimate and a comparison of the 
costs that would be incurred in carrying out H.J. Res. 88. 
However, clause 3(d)(2)(B) of that rule provides that this 
requirement does not apply when, as with the present report, 
the committee adopts as its own the cost estimate of the bill 
prepared by the Director of the Congressional Budget Office 
under section 402 of the Congressional Budget Act.

         CHANGES IN EXISTING LAW MADE BY THE BILL, AS REPORTED

    H.J. Res. 88, as reported by the Committee, makes no 
changes in existing law.

                             MINORITY VIEWS

                              INTRODUCTION

    H.J. Res. 88, Providing for congressional disapproval under 
chapter 8 of title 5, United States Code, of the rule submitted 
by the Department of Education relating to ``Improving Income 
Driven Repayment for the William D. Ford Federal Direct Loan 
Program and the Federal Family Education Loan (FFEL) Program,'' 
would nullify the Biden Administration's recently implemented 
Save on A Valuable Education (SAVE) Income Driven Repayment 
(IDR) plan. If enacted, H.J. Res 88 would sow chaos through the 
federal loan system by forcing millions of low- and middle-
income borrowers to enroll in more costly repayment plans as 
they return to repayment for the first time in over three 
years. Further, it could jeopardize both the Biden 
Administration's and any future administration's ability to 
make regulatory changes to the IDR program to support the 
economic well-being of students and borrowers.

             BRIEF HISTORY OF INCOME DRIVEN REPAYMENT PLANS

    Since the creation of the Direct Loan program in 1993, 
statute has required that an (IDR) plan must be available to 
eligible borrowers.\1\ IDR plans calculate loan payments based 
on a borrower's discretionary income rather than their loan 
balance alone, and forgive outstanding balances after a certain 
number of payments.\2\ IDR offers a variety of loan repayment 
options which in turn provides flexibility to borrowers in 
managing their debt, decreasing defaults, and improving access 
and affordability in higher education.\3\ Since the 
promulgation of the first IDR plan in 1994, several new plans 
have been established by statute and by regulation.\4\ None of 
these revised plans have ever been challenged by Congress under 
the Congressional Review Act.
---------------------------------------------------------------------------
    \1\ The Student Loan Reform Act (Title IV-A of the Omnibus Budget 
Reconciliation Act of 1993; P.L. 103-66) which authorized the Direct 
Loan program codified under HEA Sections 455(d)(1)(D) and 455(e), also 
directed the Secretary of Education to offer a variety of loan 
repayment plans, including an income-contingent repayment plan ``with 
varying annual repayment amounts based on the income of the borrower, 
paid over an extended period of time prescribed by the Secretary, not 
to exceed 25 years.)
    \2\ Cong. Rsch. Serv., The Department of Education's Notice of 
Proposed Rulemaking on Improving Income-Driven Repayment for the Direct 
Loan Program: Frequently Asked Questions, 2 (February 9, 2023), https:/
/www.crs.gov/Reports/R47418.
    \3\ H.Rep. No 103-111 at 107-113 (1993).
    \4\ For a detailed history of IDR plans, see Rita R. Zota, Cong. 
Rsch. Serv., R47418, The Department of Education's Notice of Proposed 
Rulemaking on Improving Income-Driven Repayment for the Direct Loan 
Program: Frequently Asked Questions, (2023), https://www.crs.gov/
Reports/R47418.
---------------------------------------------------------------------------

               SAVING ON A VALUABLE EDUCATION (SAVE) PLAN

    The SAVE plan is the newest iteration of the IDR program 
that was promulgated after a robust negotiated rulemaking 
process.
SAVE Plan Negotiated Rulemaking Process
    The Higher Education Act (HEA) requires the Secretary of 
Education (Secretary) to conduct negotiated rulemaking for any 
regulatory proposals related to title IV of the HEA (Title IV) 
to ensure appropriate feedback and recommendations from 
relevant stakeholders.\5\ One key purpose of negotiated 
rulemaking is to make the rulemaking process less prone to any 
subsequent litigation, which is achieved by the intentional 
convening of stakeholders that represent a wide range of 
interests likely to be involved in legal challenges to the 
rule.\6\
---------------------------------------------------------------------------
    \5\ U.S. Dep't. of Educ., The Negotiated Rulemaking Process for 
Title IV Regulations--Frequently Asked Questions, (May 5, 2021), 
https://www2.ed.gov/policy/highered/reg/hearulemaking/hea08/neg-reg-
faq.html.
    \6\ Maeve P. Carey, Cong. Rsch. Serv., R46756, Negotiated 
Rulemaking: In Brief, 4 (2021), https://www.crs.gov/Reports/R46756.
---------------------------------------------------------------------------
    In Fall 2021, the Department of Education (Department) 
began the negotiated rulemaking process on several topics 
related to college affordability and student loans.\7\ The 
negotiating committee, which was named the Affordability and 
Student Loans Committee, was tasked with developing changes to 
the IDR program. The Committee was comprised of negotiators 
representing dependent students, independent students, student 
loan borrowers, legal assistance organizations, veterans and 
military service members, State attorneys general, State higher 
education executive officers, individuals with disabilities, 
financial aid administrators, two-year public institutions, 
four-year public institutions, private nonprofit institutions, 
proprietary institutions, minority-serving institutions, 
Federal Family Education Loan (FFEL) lenders, and accrediting 
agencies.\8\ Each negotiator provided unique and thorough 
feedback to the proposed changes based on the population they 
represented.
---------------------------------------------------------------------------
    \7\ Negotiated Rulemaking Committee; Negotiator Nominations and 
Schedule of Committee Meetings, 86 Fed. Reg. 43609 (Aug. 10, 2021), 
https://www.federalregister.gov/documents/2021/08/10/2021-16953/
negotiated-rulemaking-committee-negotiator-nominations-and-schedule-of-
committee-meetings.
    \8\ U.S. Dep't. of Educ., 2021 Negotiated Rulemaking: Affordability 
and Student Loans Committee, 1-2 (Sep. 27, 2021), https://www2.ed.gov/
policy/highered/reg/hearulemaking/2021/2021negotrulemakingcomlist.pdf.
---------------------------------------------------------------------------
    In August 2022, the Biden Administration announced its plan 
to implement changes to the IDR program, including revisions to 
the Revised Pay As You Earn (REPAYE) plan, based on the 
suggestions from the Affordability and Student Loan 
Committee.\9\ Since Committee negotiators did not reach 
consensus on any specifics of the IDR provisions, the 
Department has the authority under HEA to utilize ``regulatory 
language developed during the negotiations as the basis for its 
[proposed rule], or develop new regulatory language for all or 
a portion of its [rule].'' \10\
---------------------------------------------------------------------------
    \9\ The White House, Fact Sheet: President Biden Announces Student 
Loan Relief for Borrowers Who Need It Most (Aug. 24, 2023), https://
www.whitehouse.gov/briefing-room/statements-releases/2022/08/24/fact-
sheet-president-biden-announces-student-loan-relief-for-borrowers-who-
need-it-most/.
    \10\ U.S. Dep't. of Educ., The Negotiated Rulemaking Process for 
Title IV Regulations--Frequently Asked Questions, (May 5, 2021), 
https://www2.ed.gov/policy/highered/reg/hearulemaking/hea08/neg-reg-
faq.html.
---------------------------------------------------------------------------
    In January 2023, the Department released a proposed rule 
for the IDR program changes that built on discussions during 
negotiated rulemaking.\11\ In July 2023, the Department 
released the final rule for IDR program changes, including the 
establishment of the SAVE plan, which is a revision of the 
REPAYE Plan.\12\ After analyzing over 13,000 public comments, 
the final rule did not significantly deviate from the proposed 
rule.\13\
---------------------------------------------------------------------------
    \11\ U.S. Dep't. of Educ., New Proposed Regulations Would Transform 
Income-Driven Repayment by Cutting Undergraduate Loan Payments in Half 
and Preventing Unpaid Interest Accumulation (Jan. 10, 2023), https://
www.ed.gov/news/press-releases/new-proposed-regulations-would-
transform-income-driven-repayment-cutting-undergraduate-loan-payments-
half-and-preventing-unpaid-interest-accumulation.
    \12\ Improving Income Driven Repayment for the Federal Direct Loan 
Program and the Federal Education Loan (FFEL) Program, 88 Fed. Reg. 
43820 (Jul. 10, 2023), https://www.federalregister.gov/documents/2023/
07/10/2023-13112/improving-income-driven-repayment-for-the-william-d-
ford-federal-direct-loan-program-and-the-federal.
    \13\ Id. at 43821 (Jul. 10, 2023). For a detailed summary of the 
changes made to the IDR program, see Zota, supra note 4.
---------------------------------------------------------------------------
SAVE Provisions Implemented August 2023
    Several provisions of the SAVE plan have already gone into 
effect for borrowers as they return to repayment.\14\ The SAVE 
plan significantly decreased monthly student loan payments for 
borrowers. It increased the income exemption from 150 percent 
to 225 percent of the federal poverty line for purposes of 
determining discretionary income.\15\ The plan also offers loan 
forgiveness after 10 years of payments for borrowers with 
balances less than $12,000.\16\ Additionally, as SAVE payment 
might include much less interest than a standard monthly 
payment, under SAVE, any remaining interest a borrower might 
owe after they have made their full calculated payment is 
eliminated, preventing ballooning interest.\17\ Borrowers have 
already experienced the benefits of these provisions, and H.J. 
Res. 88 would jeopardize their ability to continue in the 
program.
---------------------------------------------------------------------------
    \14\ Federal Student Aid, U.S. Dep't. of Educ., SAVE Repayment Plan 
Offers Lower Monthly Payments (last visited Oct. 4, 2023), https://
studentaid.gov/announcements-events/save-plan.
    \15\ Id.
    \16\ Id.
    \17\ Id.
---------------------------------------------------------------------------
SAVE Provisions to be Implemented July 2024
    The SAVE plan will also provide additional benefits to be 
implemented in July 2024 that will continue to reduce monthly 
payments and help borrowers manage their repayments.\18\ 
Borrowers with undergraduate loan debt will have their payments 
reduced from 10 percent to 5 percent of their discretionary 
income.\19\ Borrowers with undergraduate and graduate loans 
will pay an average of between 5 percent and 10 percent of 
their income based on the original principal balances. 
Borrowers with a principal balance of $12,000 or less will 
receive forgiveness after 10 years of payments. For every 
additional $1,000 borrowed, the maximum number of years in 
repayment increases by one year. Undergraduate loan repayment 
will be capped at 20 years of payments, and graduate loan 
repayments will be capped at 25 years of payments.\20\ 
Borrowers will also receive credit toward forgiveness for 
consolidated loans and specific periods of deferment or 
forbearance.\21\ Lastly, borrowers who are 75 days late on 
payments will be automatically enrolled in an IDR plan if the 
borrower has previously permitted the Department to access 
their tax information.\22\
---------------------------------------------------------------------------
    \18\ Id.
    \19\ Id.
    \20\ Id.
    \21\ Id.
    \22\ Id.
---------------------------------------------------------------------------
Estimated Impact on Borrowers
    The SAVE plan is the most generous repayment plan ever 
established and is expected to drastically help millions of 
low- and middle-income borrowers. The Department estimates that 
more than one million low-income borrowers will qualify for $0 
loan payments each month, allowing families to focus on basic 
needs like food, housing, and transportation.\23\ The SAVE plan 
also ensures that borrowers do not have ballooning interest by 
no longer capitalizing monthly interest not covered by a 
borrower's payment.\24\ The Department estimates that 70 
percent of borrowers who were on a different IDR plan 
previously will benefit from this provision.\25\
---------------------------------------------------------------------------
    \23\ The White House, Fact Sheet: The Biden-Harris Administration 
Launches the SAVE Plan, the Most Affordable Student Loan Repayment Plan 
Ever to Lower Monthly Payments for Millions of Borrowers (Aug. 22, 
2023), https://www.whitehouse.gov/briefing-room/statements-
releases/2023/08/22/fact-sheet-the-biden-harris-administration-
launches-the-save-plan-the-most-
affordable-student-loan-repayment-plan-ever-to-lower-monthly-payments-
for-millions-of-
borrowers/.
    \24\ Id.
    \25\ Id.
---------------------------------------------------------------------------
    The Department highlights the following other specific 
examples of SAVE's impact on borrowers:
           Borrowers will see their total payments per 
        dollar borrowed fall by 40%. Borrowers with the lowest 
        projected lifetime earnings will see payments per 
        dollar borrowed fall by 83%, while those in the top 
        would only see a 5% reduction.
           A typical graduate of a four-year public 
        university will save nearly $2,000 a year.
           A first-year teacher with a bachelor's 
        degree will see a two-third reduction in total 
        payments, saving more than $17,000, while pursuing 
        Public Service Loan Forgiveness.
           85% of community college borrowers will be 
        debt-free within 10 years because of the early 
        forgiveness for low-balance borrowers provision of the 
        plan.
           On average, Black, Hispanic, American 
        Indian, and Alaska Native borrowers will see their 
        total lifetime payments per dollar borrowed cut in 
        half.\26\
---------------------------------------------------------------------------
    \26\ Id.
---------------------------------------------------------------------------

                PREVIOUS REPUBLICAN ATTACKS ON IDR \27\
---------------------------------------------------------------------------

    \27\ See also H.R. Rep. No. 118-71 at 18-19 (outlying the same 
argument in relation to H.J. Res. 45, a statement of Congressional 
disapproval under the Congressional Review Act to the one-time student 
debt relief proposed by the Biden Administration. While the CRA attempt 
was not successful, the program was struck down by the Supreme Court. 
Biden v. Nebraska, 143 S. Ct. 2355 (2023).
---------------------------------------------------------------------------
    H.J. Res. 88 is not the first attempt by Republicans to 
attack the Biden Administration's IDR program. On April 26, 
House Republicans passed H.R. 2811, their Limit, Save, Grow 
Act, with four Republicans joining all voting Democrats in 
opposition.\28\ This bill would require 22 percent across the 
board cuts to all non-defense discretionary spending over the 
next ten years.\29\ In addition to these harmful cuts to 
funding for low-income students, students with disabilities, 
and student mental health services, the bill would have 
rescinded both the SAVE plan and the one-time student debt 
relief program the Biden Administration previously 
proposed.\30\ It would also prohibit the Department, under any 
administration, from drafting or proposing any ``economically 
significant regulations'' or executive action regarding federal 
student loans.\31\ This thoroughly unserious bill was the 
vehicle House Republicans attempted to use as a starting point 
in their negotiations with the White House in talks to raise 
the debt limit under which the Treasury can borrow to meet 
existing legal obligations. House Republicans have already 
passed H.R. 2811 to overturn the IDR program changes and go a 
step further to prohibit any future regulatory changes to the 
loan program but are still moving forward with H. J. Res. 88 in 
what seems like a fruitless endeavor harmful to borrowers.
---------------------------------------------------------------------------
    \28\ H.R. 2811, 118th Cong., Sec. 212 (2023).
    \29\ Id.
    \30\ U.S. Dep't. of Educ., Fact Sheet: House Republican Proposals 
Hurt Children, Students, and Borrowers, and Undermine Education (Apr. 
25, 2023), https://www.ed.gov/news/press-releases/fact-sheet-house-
republican-proposals-hurt-children-students-and-borrowers-and-
undermine-education.
    \31\ H.R. 2811, 118th Cong., Sec. 212 (2023).
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           H.J. RES 88 HARMS BORROWERS AND CREATES CONFUSION

    If enacted, H.J. Res. 88 would bar the Biden Administration 
from continuing to implement the SAVE plan, requiring the 
Department to promptly change all repayment plans for borrowers 
enrolled in SAVE. Borrowers currently enrolled in SAVE would be 
forced to enroll in a different repayment plan, but it remains 
unclear whether the borrower would be re-enrolled in their 
previous repayment plan or if they would be automatically 
enrolled in REPAYE. Regardless, this would revert $0 payments 
for over one million borrowers and would increase payments for 
millions more. Since SAVE was designed to support the 
successful loan repayment of low-income borrowers, H.J. Res. 88 
could also create a spike in loan delinquency and default, 
especially as we enter an unprecedented return to repayment. 
The timing of this resolution creates further confusion; it is 
unclear how quickly the Department would need to enforce the 
retroactive effect of the resolution. This claw back process 
would be extremely complicated and confusing for borrowers, 
servicers, and the Department.
    Committee Democrats are very concerned that borrowers 
enrolled in SAVE may also have to worry about:
           Their monthly payment amount. It is unclear 
        how long it will take for the Department and servicers 
        to operationalize and implement an unprecedented and 
        required change to enroll borrowers in a less-generous 
        repayment plan.
           Uncertainty around interest costs. Borrowers 
        will not know how much in additional loan costs they 
        will pay if they are required to change to a plan that 
        does not address ballooning interest, making payment 
        amounts unclear.
           Accessing support from loan servicers. 
        Servicers, who have been preparing for return to 
        repayment under certain plans will now have to turn on 
        a dime which will invariably result in confusion. 
        Servicers will be overwhelmed supporting an 
        unprecedented number of borrowers applying for 
        different repayment plans in a short period of time and 
        amid all the expected tumult of borrowers returning to 
        repayment.
           Legal equities in repayment. Borrowers who 
        have relied on determinations of what their payment 
        amount will be under SAVE could face situations where 
        their servicer under state or federal law must add 
        interest charges to monthly payments after telling them 
        under the SAVE plan such payments were not required.
    Republicans believe the SAVE plan is merely a ``scheme'' to 
``buy votes ahead of the next election.'' \32\ They argue that 
SAVE exacerbates rising college costs and excessive borrowing; 
however, there has been no conclusive research that shows that 
increasing loan relief through IDR leads directly to increased 
tuition costs at public institutions. Republicans have 
continued to push for streamlining the loan repayment programs 
by creating one standard and one income-based repayment 
plan.\33\ Their proposed IDR plan does not address critical 
affordability issues within the loan system, but rather focuses 
on saving money for the taxpayer.\34\ Through legislation and 
commentary, Republicans have made clear their loan reforms are 
not centered around supporting the economic well-being of low- 
and middle-income borrowers.
---------------------------------------------------------------------------
    \32\ H. Comm. on Educ. & the Workforce Republicans, Press Release, 
McClain, Foxx Introduce CRA Resolution to Stop Biden's Latest Free 
College Scheme (Sep. 5, 2023), https://edworkforce.house.gov/news/
documentsingle.aspx?DocumentID=409498.
    \33\ H. Comm. on Educ. & the Workforce Republicans, FAIR Act Brings 
Clarity to Student Loan Borrowers, Protects Taxpayers (Jun. 15, 2023), 
https://edworkforce.house.gov/news/
documentsingle.aspx?DocumentID=409295.
    \34\ Id.
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     IMPLICATIONS FOR FUTURE DEPARTMENT RULES ON LOAN MODIFICATIONS

    The Congressional Review Act prohibits agencies from 
issuing ``a new rule that is substantially the same as the 
disapproved rule unless subsequent law specifically authorizes 
the reissued rule.'' \35\ In promulgating a new regulation on 
repayment plans, the Department would not ever be able to 
create as generous an IDR plan. Furthermore, it remains unclear 
how ``substantially the same'' would be interpreted if the 
Department were to promulgate a new IDR plan in the future. It 
appears there are significant complexities in determining which 
aspects of a new regulation would require alteration or 
omission to comply with the Congressional Review Act.
---------------------------------------------------------------------------
    \35\ 5 U.S.C. Sec. 801(b). But see Maeve Carey, Cong. Rsch. Serv., 
IN10996, Reissued Labor Department Rule Tests Congressional Review Act 
Ban on Promulgating ``Substantially the Same'' Rules (2019), https://
www.crs.gov/Reports/IN10996 (explaining that the ``same or similar'' 
standard is not defined in the Congressional Review Act, and 
highlighting recent attempts by agencies to promulgate a rule on a 
similar subject as a rule that had been previously successfully 
disapproved under the Congressional Review Act).
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                               CONCLUSION

    At the time of this markup, House Republicans have already 
passed their detrimental Limit, Save, Grow Act that would have 
prohibited the Biden Administration from implementing their 
SAVE plan. H.J. Res. 88 is just another attempt by House 
Republicans to attack the Biden Administration for addressing 
the serious financial concerns of low- and middle-income 
student loan borrowers. This is not a worthwhile use of this 
Committee's time. For the reasons stated above, all Committee 
Democrats present unanimously opposed H.J. Res 88 when the 
Committee on Education and the Workforce considered it on 
September 13, 2023. We urge the House of Representatives to do 
the same.

                                   Robert C. ``Bobby'' Scott,
                                           Ranking Member.
                                   Raul Grijalva.
                                   Joe Courtney.
                                   Frederica S. Wilson.
                                   Suzanne Bonamici.
                                   Mark Takano.
                                   Mark DeSaulnier.
                                   Pramila Jayapal.
                                   Jahana Hayes.

                              [all]