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Chairwoman Foxx, Ranking Member Cassidy Seek Transparency on Biden’s Decision to Cancel $39 Billion in Student Debt

WASHINGTON – Today, House Education and the Workforce Committee Chairwoman Virginia Foxx (R-NC) and Senate Health, Education, Labor, and Pensions Committee Ranking Member Bill Cassidy, M.D. (R-LA) urged the Department of Education to provide details on its methodology in determining which student loan borrowers qualify for debt cancellation under the current income-driven repayment (IDR) program. This comes as President Biden recently announced that 804,000 borrowers would receive a total of $39 billion in loan cancellation following the Department’s adjustment of the IDR program’s qualification standards. The lawmakers also seek information as to what legal authority the Biden administration used to justify changing the standards that allowed these borrowers to become eligible for the IDR program.  

This action is in addition to President Biden’s new IDR rule, which will result in a majority of bachelor’s degree student loan borrowers not having to pay back even the principal on their loans, costing taxpayers as much as $559 billion. This week, Foxx and Rep. Lisa McClain (R-MI) introduced a Congressional Review Act (CRA) resolution to overturn President Biden’s new IDR rule. 
In a 2022 report, the Government Accountability Office (GAO) found there were 7,700 loans held by 3,000 borrowers with balances totaling $49 million in the IDR program that were in repayment for 20-25 years. The report also identified that there were 62,600 additional loans in repayment long enough to be potentially eligible for IDR loan cancellation, but that they were ineligible because of insufficient qualifying payments, such as forbearance. 
“On July 14, 2023, the Department of Education (Department) announced its plans to discharge $39 billion dollars in student loans through so-called ‘fixes’ to Income Driven Repayment (IDR) plans via a press release, without explaining its methodology or statutory authority for doing so,” wrote the lawmakers“The numbers identified in the GAO report could not account for $39 billion in loan discharges for 804,000 individuals.”  
“The Department has not shared what statutory authority it is using either to justify this expenditure of taxpayer dollars or the expansive interpretation of the law that led to the fixes,” continued the lawmakers“Accordingly, we write to understand what legal authority the Department used to carry out the ‘fixes’ and to understand the process it underwent to identify the 804,000 individuals whose loans were discharged.”  
Read the full letter here.  


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