Coalition Demands Independent Analysis of Student Loan Bailout Rule that Would Cost Taxpayers Billions
American Commitment is leading a coalition of 12 national taxpayer groups, representing millions of members and supporters, in requesting that a new independent analysis of a disastrous Department of Education proposed rule be immediately conducted. The proposed “Defense to Repayment Regulations” rule will impose enormous costs on taxpayers.
In a letter sent to the Office of Information and Regulatory Affairs (OIRA)—which is reviewing the proposed rule—the coalition states: “We formally request that a new analysis of the proposed regulation be conducted, independent of the Department of Education, in order to more precisely determine the expected economic impact of this rule, and that finalization and implementation of the regulation be delayed until such an analysis is completed.”
“Our nation cannot afford another federal bailout and should not adopt one via a regulatory back door,” said Phil Kerpen, president of American Commitment. “When a regulation is estimated to cost taxpayers $2 billion to $43 billion, you can assume that the government agency actually has no real sense of what the final price tag will be—but it won’t be cheap. And regardless of price, taxpayers should not be compelled to pay for bad student loans without any debate or vote in Congress.”
The Department of Education’s own analysis in the proposed rule found “a net budget impact in costs over the 2017-2026 loan cohorts ranging between $1.997 billion in the lowest impact scenario to $42.698 billion in the highest impact scenario.” The coalition argues that “this shockingly imprecise estimate suggests the department is incapable of reasonably estimating what the ultimate costs to taxpayers will be—and indeed there is significant risk that the costs could exceed the $43 billion top of their range.”
The letter continues: “Such an enormous commitment of federal taxpayer dollars should not be made through agency rulemaking without an express directive from Congress, and it certainly should not be made without a far more rigorous analysis and estimate of what the costs to taxpayers will end up being that the Department of Education has conducted to date.”
The entire letter can be viewed below: