Urge Congress to Reject Efforts That Will Push Students and Families Into the Grips of Private Loan Industry and Exacerbate the Student Debt Crisis
January 31, 2024 | WASHINGTON, D.C. — Today, the House Education and Workforce Committee is considering the College Cost Reduction Act, H.R. 6951. This bill is the next iteration of legislative efforts to attack student loan borrowers and their families, and dismantle unprecedented efforts by the Biden Administration to provide much-needed student debt relief.
In response, Student Borrower Protection Center (SBPC) Senior Advisor for Policy and Strategy, Aissa Canchola-Bañez issued the following statement:
“Make no mistake, H.R. 6951 is a dangerous attack on working families masquerading as the solution to the college affordability and student debt crises. In reality, this bill will snatch the dream of a higher education from countless students and drive millions of borrowers and their families into the jaws of the predatory private student loan industry.
“Instead of making necessary investments to address decades of chronic underfunding of our higher education system, this bill purports to reign in college costs at the expense of students and their families and will exacerbate the student debt crisis. By ending access to federal Graduate PLUS and Parent PLUS loans, H.R. 6951 will push many low-income students and their families into riskier and more costly private student loans that will be harder and more expensive to pay off down the road.
“This bill is the latest in an ongoing effort on the Hill to actively obstruct efforts to provide meaningful debt relief to millions, often at the expense of their own constituents. Now, these same lawmakers are trying to gaslight the American people into thinking that they are proposing solutions. 45 million student loan borrowers and their families can see right through this and call on policymakers to enact real solutions that will finally invest in higher education as a public good and bring an end to the student loan debt crisis once and for all.”
Background
In January, Representative Virginia Foxx, Chairwoman of the House Education and Workforce Committee, introduced H.R. 6951, The College Cost Reduction Act, a legislative proposal that would drastically overhaul the higher education system, including by capping financial aid and repealing federal student loan programs like the Graduate PLUS and Parent PLUS loan programs for future borrowers. By eliminating access to these federal loan programs while failing to adequately invest in financial aid programs like the Pell Grant, this bill will push students and families into the dangerous and risky private student loan market and could drive higher education out of reach altogether.
Despite the name of the bill, the College Cost Reduction Act fails to address the decades of chronic underfunding of our public higher education system, the rising cost of attendance across our nation’s community colleges and rectify deep funding inequities for Historically Black Colleges and Universities and other minority-serving institutions—efforts that will actually help bring down the cost of college and ensure that students are not forced to take on record levels of debt.
Instead, the bill caps access to federal financial aid and sunsets existing Income-Driven Repayment plans for future borrowers—including the most generous option to date, the Saving on a Valuable Education (SAVE) Plan. It would replace them with a standard 10-year repayment plan and a far less generous “repayment assistance plan” which would make low-income borrowers have to pay more with no chance of relief, essentially locking them into repayment for the rest of their lives.
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About Student Borrower Protection Center
Student Borrower Protection Center (SBPC) is a nonprofit organization focused on eliminating the burden of student debt for millions of Americans. We engage in advocacy, policymaking, and litigation strategy to rein in industry abuses, protect borrowers’ rights, and advance racial and economic justice.
Learn more at protectborrowers.org or follow SBPC on Twitter @theSBPC.