Higher Education

Top Education Department officials slam budget cuts in Republican debt ceiling proposal

Dive Transient:

  • Prime U.S. Division of Schooling officers on Tuesday continued to slam a Republican spending proposal spearheaded by Home Speaker Kevin McCarthy that might increase the federal debt ceiling however impose deep finances cuts on the company.
  • Schooling Secretary Miguel Cardona, who has already publicly criticized the GOP debt ceiling plan, stated in a cellphone name with reporters Tuesday that McCarthy is exhibiting “staggering recklessness” along with his strategy. Cardona stated the plan, which might strike down a plan to forgive mass quantities of pupil mortgage debt, would damage essentially the most susceptible college students.
  • President Joe Biden has already rejected the GOP blueprint and stated the White Home won’t negotiate over it. The plan shouldn’t be anticipated to realize traction within the Democrat-controlled Senate.

Dive Perception:

Republicans are establishing a battle over the debt ceiling in an try to reign in federal spending. Pundits additionally say it is meant partly to power the president to come back again to the negotiating desk earlier than the 2024 presidential election. 

The proposal would elevate the debt ceiling by $1.5 trillion or droop it till March 2024, whichever comes first. The present nationwide debt ceiling sits at $31.4 trillion — it was final raised in 2021.

The Republican plan doesn’t include exact finances cuts, however would cut back discretionary spending to fiscal 2022 ranges. The Biden administration has said the scheme would slash funding by 22% throughout the board, however because it wouldn’t contact protection spending, it could imply important reductions for different federal businesses. 

Notably, the plan would additionally block Biden’s mass pupil mortgage forgiveness program that’s at present stalled earlier than the U.S. Supreme Courtroom. This system would wipe away $10,000 in debt for debtors incomes as much as $125,000 and as much as $20,000 for many who obtained Pell Grants, a main supply of federal pupil assist for low-income households. 

Additional, it could halt the Biden administration’s proposed regulatory adjustments to income-driven compensation plans, which might reduce the month-to-month quantity debtors pay again — from 10% of what the Schooling Division considers discretionary earnings to five%.

And it could finish the pandemic-era moratorium on pupil mortgage funds that started through the Trump administration.

A senior Schooling Division official throughout Tuesday’s name expressed explicit concern concerning the plan forcing month-to-month funds to restart, citing a statistic that 1 million debtors have been defaulting on loans yearly earlier than the pandemic. 

Two distinguished Home Republicans are urgent the Schooling Division for particulars surrounding the upcoming mortgage cost reinstatement.

In a Tuesday letter to Cardona, North Carolina Rep. Virginia Foxx and Utah Rep. Burgess Owens known as for a replica of the Schooling Division’s motion plan to restart month-to-month funds, in addition to communications between the division and mortgage servicers.

The lawmakers additionally requested how a lot funding and workers the division has designated for the return of pupil mortgage servicing. They set a Might 9 deadline for Cardona to reply to their questions.

Funds are set to renew 60 days after certainly one of two occasions — both the courts permitting the debt forgiveness program to begin clearing balances or June 30, 2023, whichever comes first.

Laura Spitalniak contributed to this story.


Related Articles

Leave a Reply

Your email address will not be published. Required fields are marked *

Back to top button