U.S. Sen. Bill Cassidy (R-LA) is not happy about the findings in a new Government Accountability Office (GAO) report released Aug. 14 showing that as of January, just 40 percent of student loan borrowers were making payments on their loans.
The report’s release follows a court order issued in July that blocked the Biden administration’s latest repayment program, prompting the U.S. Education Department to suspend student loan payments and interest for around eight million borrowers.
“Let’s be clear, the Biden-Harris administration is not canceling debt,” Sen. Cassidy said on Wednesday. “They are trying to take the debt from those who willingly took it on and transfer it onto the 87 percent of Americans who chose to not go to college or already paid off their education.”
According to the just-released GAO report, federal student loan payments resumed in October 2023 after more than three years of pause due to COVID-19. As of January, the Education Department held $1.5 trillion in federal loans for nearly 43 million borrowers.
Of the borrowers whose loans had entered repayment and weren’t in default: about half — accounting for about $706 billion in loans — were current on their payments; nearly 30 percent — accounting for about $290 billion in loans — were past due on their payments; and the rest — accounting for about $254 billion in loans — were not expected to make payments because of deferment or forbearance, the GAO report says.
“The Biden-Harris administration is misleading these borrowers to win their vote while setting them up for failure,” said Sen. Cassidy. “These borrowers are racking up interest with missed payments while waiting for the false promise of widespread debt cancellation this administration has no legal authority to deliver.”
Sen. Cassidy, ranking member of the U.S. Senate Health, Education, Labor, and Pensions Committee, and U.S. Rep. Virginia Foxx (R-NC), chairwoman of the U.S. House Education and the Workforce Committee, in September 2023 requested the GAO review of the department’s work to return student loan borrowers to repayment.
Since then, the administration placed more borrowers in forbearance, decreasing the number of borrowers making payments on their debt, the lawmakers said in their joint statement, which noted that borrowers who choose not to pay will still be charged interest on their unpaid loans, a policy they say violates the Fiscal Responsibility Act and misleads borrowers on what their responsibilities are to repay their loans.
“The majority of borrowers don’t believe they need to pay back the loans they knowingly took on, and who can blame them after years of false hope and illegal schemes from the Biden-Harris administration?” said Rep. Foxx. “It’s past time for this administration to quit lying to the American public and focus on real solutions to deal with the cost of postsecondary education.”