A group of GOP House Education and Workforce Committee members, led by Republican North Carolina Chairwoman Virginia Foxx, raised concerns Friday about whether the Biden administration’s student loan consolidation scheme is legal.
In a letter obtained by the Washington Examiner, Foxx, along with 12 Republicans, demanded answers from Education Secretary Miguel Cardona about whether the consolidation of Federal Family Education Loans into the Direct Loan program “in order to further its ‘free’ college agenda.”
“The Biden administration has relentlessly pursued shifting the burden of repaying federal student loans onto taxpayers with complete disregard to its legal authority,” read the letter, adding that other matters, such as the bungled Free Application for Federal Student Aid, or FAFSA, rollout, have “demonstrated the Department’s serious need to increased oversight and accountability.”
The letter comes as the Biden administration continues to search for ways to “cancel” student loan debt, which critics claim is forcing taxpayers to foot the bill for college degrees.
The legislators raised questions about whether Joe Biden’s administration allows ineligible borrowers with FFEL loans to consolidate debt utilizing federal programs that are supposed to limit the types of borrowers who can access them significantly.
FFEL loans are older versions of federally guaranteed loans, but they are sourced from private lenders. With Obamacare’s passage, the federal government decided to phase out guaranteeing loans from private lenders in favor of the Direct Loan Program, which made the federal government both the guarantor and lender.
Critics are concerned that the administration’s debt cancelation scheme is trying to expand the definition of who is eligible for debt cancelation and allowing individuals who still hold FFEL loans to consolidate into Direct Loans outside legal bounds.
The Office of Federal Student Aids is a performance-based organization under the auspices of the federal government, meaning it can receive more personnel scrutiny and is required to meet higher operational standards than the majority of government offices “to increase the accountability of the officials responsible for administering the operational aspects of these programs,” stated the letter.
The FSA’s status as a PBO, in particular following the chaotic FAFSA rollout and additional headaches, was “outrageous and a dereliction of duty,” requiring “the need for intense Congressional oversight.”
The letter read, “Given FSA’s abominable history of flouting the law and skirting consequences, we have no confidence in the Department’s ability to follow the directives of Congress detailed in the [Higher Education Act].”
Legislators are seeking all internal communications related to concerns about loan consolidation and guidance from the department to servicers of student loans to ensure FFEL consolidation can be legally done.
Foxx was joined on the letter by Representatives Glenn Thompson of Pennsylvania, Burgess Owens of Utah, Joe Wilson of South Carolina, Lloyd Smucker of Pennsylvania, Tim Walberg of Michigan, Elise Stefanik of New York, Jim Banks of Indiana, Rick Allen of Georgia, Julia Letlow of Louisiana, Michelle Steel of California, Aaron Bean of Florida, and Brandon Williams of New York.
An official with the Department of Education said, “The Department has received the letter and will respond to the authors.”
