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Plan B $750B student debt transfer to taxpayers draws bicameral rejection

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Transferring student debt to taxpayers in a “Plan B” costing $750 billion has drawn a bicameral rejection letter authored by a North Carolina congresswoman and Louisiana senator and sent to the head of the Department of Education.

Signed by 130 Republican members of Congress, Secretary Miguel Cardona is told the latest rule-making proposal should be withdrawn and in no way could be the intent of the 1965 Federal Loan Insurance Program or its 2008 reauthorization. The letter led by U.S. Rep. Virginia Foxx, R-N.C., and Sen. Bill Cassidy, R-La., said the Education Department is making an even broader attempt to send the debt of 28 million borrowers, some with annual income exceeding $300,000, to taxpayers in a “backdoor attempt to enact ‘free’ college.”

In part, the letter reads, “The Supreme Court has made it abundantly clear that there is zero authority to write-off federal student loans en masse last June when the Department’s ‘Plan A’ was ruled unconstitutional.”

Foxx, seeking her 11th two-year term in November, is chairwoman of the Committee on Education and the Workforce in the House of Representatives. Cassidy, a gastroenterologist before entering politics, is ranking member of the Committee on Health, Education, Labor and Pensions in the Senate.

The Department of Education on April 17 filed a Notice of Proposed Rule Making, also known as NPRM, describing “targeted relief.” The letter reads in part, “The Department notes that the long-anticipated regulation to ‘cancel’ loans for borrowers facing ‘hardship’ – a broad term defined under the NPRM to grant the Department full authority to cancel any loan it pleases – is still forthcoming. According to budget experts, those additional changes would bring the total cost of the Department’s ‘Plan B’ to nearly $750 billion, at almost double the cost of ‘Plan A.’”

The letter further criticized Cardona and his department for putting “resources to draft this proposal to benefit those who already were able to attend college” while “simultaneously” failing to “competently implement the Free Application for Federal Student Aid.” FAFSA helps needy prospective college applicants and their families afford higher education.

“We already know,” the letter says, “as of March 29, FAFSA completion for seniors in high school is down 40%. Those who do not file will likely not attend college next year and maybe never will.”

Thom Tillis and Ted Budd, North Carolina’s two Republican U.S. senators, were among the signers. In addition to Foxx, the other House members from North Carolina signing were Reps. Richard Hudson and Chuck Edwards.