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Education Department will release some frozen grants supporting after-school and summer programs
Education Department will release some frozen grants supporting after-school and summer programs

The Independent

time3 days ago

  • Politics
  • The Independent

Education Department will release some frozen grants supporting after-school and summer programs

The Education Department will release some previously withheld grant money for after-school programs, days after 10 Republican senators sent a letter imploring the Office of Management and Budget to allow the funds to be sent to states. President Donald Trump's administration on July 1 withheld more than $6 billion in federal grants for after-school and summer programs, adult literacy and English language instruction, as part of a review to ensure spending aligned with the White House's priorities. About $1.3 billion of that funding supported after-school programming for children. In a letter sent Wednesday, Republican senators said the withheld money supported programs that had longstanding bipartisan support and were critical to local communities. 'We share your concern about taxpayer money going to fund radical left-wing programs,' the senators wrote. 'However, we do not believe that is happening with these funds.' ____ The Associated Press' education coverage receives financial support from multiple private foundations. AP is solely responsible for all content. Find AP's standards for working with philanthropies, a list of supporters and funded coverage areas at

Thanks to Congress and SCOTUS, the walls are closing in on student loan borrowers
Thanks to Congress and SCOTUS, the walls are closing in on student loan borrowers

Fast Company

time3 days ago

  • Business
  • Fast Company

Thanks to Congress and SCOTUS, the walls are closing in on student loan borrowers

The already complicated process of paying back student loans just got even more complicated. Earlier this week, the Supreme Court ruled in a 6-3 decision to let President Donald Trump resume hollowing out the Department of Education, lifting the lower court injunction that halted his efforts back in May. (SCOTUS provided no rationale for the decision, other than the lack of any law expressly prohibiting it—not unlike Air Bud rules.) The decision allowed Trump to continue laying off Education employees by the hundreds, and to offload some of the department's key programs to other agencies. The potential disruption in loan servicing systems and processes that may follow, however, is just the latest financial challenge student loan borrowers are now up against. Student borrowers have walked an uncertain path out of the pandemic. In August 2022, during a years-long federal pause on payments that would ultimately end one year later, President Joe Biden attempted to issue a sweeping tide of debt cancellation. He invoked the HEROES Act, a 9/11-era law that lets the Department of Education augment student loans during a national crisis, but the move was quickly challenged by Republican senators and blocked by lower courts. SCOTUS eventually struck down the mass loan forgiveness effort in June 2023, ruling that the president lacked statutory authority. In response, the administration pivoted to selective work-arounds, ultimately approving more than $180 billion in student-debt relief for more than 5 million borrowers by January 2025. A lot has changed in the months since, including the May introduction of involuntary debt collection for some of the 5.3 million student borrowers in default, after years of pandemic-era leniency. Many of the changes, however, have arrived in just the past two weeks, and they're going to have long-lasting consequences. One big beautiful debacle Considering all the competing concerns around Trump's puerilely titled Big Beautiful Bill, some of its myriad provisions have received less attention than others. Among them are a flurry of changes to the way student borrowers repay loans—both future borrowers and current ones. At the moment, borrowers have the ability to pause student-loan payments if they lose their job or earn less than the minimum wage. The passage of the tax bill, however, completely eliminates those unemployment and economic hardship deferment options for students taking out federal loans after July 2027. Rather than encourage more responsible borrowing, this move seems likely to result in far more defaulting on loans. The biggest change from the tax bill for student borrowers, however, is that the existing slate of at least six repayment plans will be streamlined into just two options as of next summer. Trump's bill terminates current plans such as the Income-Contingent Repayment plan, PAYE plan, and Biden's much-challenged SAVE plan (more on that one momentarily) in favor of either a fixed repayment option or the income-fueled Repayment Assistance Program, which allows borrowers to apply part of their monthly income to loan repayment for up to 30 years. Student borrowers using any current plans have until July 2028 to pick one of the new ones. Of those affected, though, current SAVE plan borrowers may have the most to sweat over. Interest payments return soon for millions When student loan payments resumed in August 2023, after a three-and-a-half-year pause, borrowers had to navigate making them against the rising cost of living and stagnant wages that drove economic panic throughout the 2024 election. No wonder only about half of the nearly 43 million borrowers who collectively owed $1.5 trillion in outstanding student loans as of January 2024 remained up to date on their payments. Easing some of their burden, Biden's SAVE, or Saving on a Valuable Education plan, sought to make student loan payments more affordable by scaling them according to income and family size—and in some cases erasing them altogether. Last July, though, amid multiple lawsuits alleging Biden lacked the authority to enact the SAVE plan, federal judges in two district courts put SAVE on ice while weighing the legal merit of those suits. As a result, borrowers enrolled in SAVE fell into administrative forbearance, with a pause on monthly payments and interest accrual. But back in February, an appeals court sided with the lawsuits, sending the SAVE plan into further legal limbo. Now the so-called One Big Beautiful Bill Act includes text that eliminates the SAVE plan entirely starting next year. Within days of the tax bill's passage, the Department of Education deemed the Biden administration's deployment of the SAVE plan 'illegal' and announced that loan payments and interest fees for 8 million student loan borrowers would resume on August 1. It was the last major announcement from the department before SCOTUS ruled on Monday that the president could continue gutting it, further obscuring the path ahead for borrowers. More administrative chaos on the way Not only was shutting down the Department of Education one of the objectives listed in Project 2025, it's been a goal of the conservative movement since at least 1980, when then-candidate Ronald Reagan campaigned for president in part on a promise to abolish the then-newly opened department. (Since Democrats controlled congress at the time, they later blocked the Reagan administration's efforts to abolish it.) Now that this mission to leave education up to individual states is on the verge of total success, the process for repaying loans is potentially headed for total chaos. Trump previously announced plans to move management of the entire $1.6 trillion student loan portfolio from the Department of Education to the Small Business Administration, but conducting a migration of that magnitude without an airtight strategy in place will almost certainly lead to untold disruption in services. 'It takes resources to manage that asset, including trained staff to make sure borrowers have good information and colleges can administer loan programs properly,' Peter Granville, a higher education finance expert, told CBS News back in March, when Trump began dismantling the department. 'It takes technical expertise that only Education Department officials have.' The sloppy rollout of cuts by Elon Musk's Department of Government Efficiency this year does not exactly instill confidence that this administration will implement any changes to loan servicing systems with care and finesse. Indeed, when the administration initially laid off half the staff from the Department of Education in March—a move officially allowed by this week's SCOTUS ruling— an hours-long outage at followed the next day, along with other FAFSA (Free Application for Federal Student Aid) outages. Who knows how much further deterioration will ensue when even more institutional knowledge is lost? The legality of the plan to shut down the Department of Education will almost certainly face other challenges in the months and years ahead, leaving borrowers exposed to potential back-and-forth shifts that could cause billing confusion, lost payment data, or worse. One thing's for sure, though: Whatever Biden-era student borrowers have learned while in college, when the bill comes due, they may never know exactly how much they owe and to whom they owe it.

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