Foxx Stands Up for Borrowers
WASHINGTON, D.C., September 20, 2022
Today, Education and Labor Committee Republican Leader Virginia Foxx (R-NC) spoke on the House floor in opposition to S. 1098, the Joint Consolidation Loan Separation Act, because of its flawed design, inability to provide borrowers stuck in joint consolidated loans immediate relief, and failure to protect taxpayers:
“While I fully support the underlying intent of S. 1098, the Joint Consolidation Loan Separation Act, I have concerns about the bill as drafted. The purpose of this bill is to protect student loan borrowers who consolidated their loans with a spouse, but now seek to reverse this process. Yet as written, this bill undermines that purpose.
“I am concerned this bill will hurt the very borrowers we are trying to help. We never want to see a spouse, especially one who is a victim of domestic violence, forced to be financially tied to his or her abuser. We want to give these borrowers a way out. However, we also recognize that it is not only the abused spouse that may be applying for these new consolidations.
“Under the Senate-passed language, when a borrower files for a new consolidated loan, he or she could potentially leave his or her spouse with the remaining balance. We must be cognizant of the fact that a borrower could use this new legislation as a weapon. This is why we need safeguards in place to ensure that both parties are not subject to potential abuse through the separation process and not just the one filing for a new consolidation.
“Additionally, the Department of Education has stated that it will take 12 to 18 months to implement this bill. Given the urgency of the situation that many borrowers are in, this kind of delay is unacceptable. We need to provide these borrowers with a quicker way out of their joint consolidation loan. Yet Democrats rejected the Republicans’ solution that will give these borrowers an almost immediate separation without unnecessary paperwork that will bog down the process.
“Further, I am concerned that this bill could be used by the Secretary of Education to stage an even broader takeover of student loans. It would be simpler and more straightforward to allow these loans, once separated, to remain with their current holder, but instead, this legislation attempts to drive as many of these loans as possible into the government-run Direct Loan program.
“We have ample evidence to believe that the Biden Department of Education will take the inch given in this legislation and use it to go a mile. The administration’s illegal expansions of the Income-driven repayment program and Public Service Loan Forgiveness program—let alone Biden’s student loan bailout—are evidence of that.
“For example, the vague language included in this bill, namely the authority for the Secretary of Education to allow for new consolidation loans if it’s in ‘the fiscal interest of the federal government.’ The Education Department has not been able to provide clarity on what this phrase means or how it applies to this bill, but it has been used previously by this administration to force billions of dollars’ worth of loans made by private lenders onto the government’s books. Moreover, the President’s $1 trillion dollar transfer of wealth from hardworking taxpayers to college graduates clearly illustrates this administration has no intention of protecting the ‘fiscal interest of the federal government.’
“We must not create any loopholes or backdoors for the Biden administration to exploit. Transferring massive amounts of student loan debt to taxpayers is harming our economy and setting a horrible precedent for future borrowers; not to mention failing to solve the underlying problems in postsecondary education.
“Because of these issues, Republicans have a solution that will allow student loan servicers to separate joint consolidation loans almost immediately, instead of having to wait over a year to receive relief.
“Our solution is a commonsense and practical way to accomplish the same goal as this legislation, but more quickly and efficiently.
“Republicans are willing to work across the aisle to ensure borrowers are taken care of, but unfortunately, Democrats are more focused on opening more avenues for the administration to expand its radical loan bailout.”