Bill of the Month — April 2022: Federal Student Loan Integrity Act

The Taxpayers Protection Alliance’s (TPA) bill of the month for April 2022 is H.R. 7058, the Federal Student Loan Integrity Act, introduced by Reps. Bob Good (R-Va.) and Jim Banks (R-Ind.). The bill would prevent the Secretary of Education from continuing to unilaterally extend the student loan repayment moratorium associated with the current state of emergency.

For roughly two years now, the coronavirus emergency declaration and the Higher Education Relief Opportunities for Students (HEROES) Act have given the Department of Education authority to suspend repayments on outstanding federal student loans. This moratorium has been extended a number of times since, with the latest scheduled to last until August 31^st of this year.

This pattern is not without its consequences. According to estimates, the moratorium has cost American taxpayers $50 billion per year since its implementation. The cost of the moratorium dwarfs all other federal education expenses over that same time period. Further extensions will contribute even more to trillion dollar deficits and rampant inflation.

This moratorium acts as a tax on the American people, while benefitting a very small, affluent section of the population. While the administration points to this as an issue of defending struggling, low-income Americans, it is actually benefitting the wealthiest at the expense of everyone else. According to the Brookings Institution, the top 20 percent of earners in America stand to gain the most from the moratorium. In fact, top earners hold three times as much student loan debt as the bottom 20 percent of earners.

H.R. 7058 clarifies that it was not the intent of Congress to provide the administration with blanket authority to continue this moratorium forever. With the height of the pandemic behind the nation and restrictions being lifted, there is no longer any reasonable justification to continue these reckless policies. The Secretary of Education has abused the authority granted under the HEROES Act to create a massive federal benefit.

This bill is important to re-establish the separation of powers between the legislative and executive branches. Congress has the power of the purse and the power to levy taxes. The constant extensions of the moratorium impose significant cost and act as a tax on Americans who were either responsible enough to pay off their debts or who did not accrue the debt in the first place. The Constitution gives the executive branch the power to execute the laws, as written by Congress, not to create them unilaterally.

H.R. 7058 clearly states that the Department of Education is barred from issuing any further extensions absent additional authorization from Congress. This will save Americans billions in the short-term and many more in the long-term, given the administration’s unwillingness to let the moratorium end.

It is for these reasons and many more, that TPA is proud to make the Federal Student Loan Integrity Act, introduced by Reps. Bob Good and Jim Banks, its bill of the month for April of 2022.