House Passes Bill Nullifying Student Loan Forgiveness Credit

House Republicans just approved a plan to repeal key Biden student debt relief initiatives. Advocacy groups are warning that if the plan is ultimately enacted, millions of borrowers could have their student loan forgiveness credit voided. And thousands who already received loan forgiveness could have their discharged debts reinstated.

Biden has promised to veto the measure. But his administration’s student debt relief initiatives remain under attack.

Here’s the latest.

House Republicans Approve Resolution Nullifying Biden’s Student Loan Forgiveness Plan And Student Loan Pause Extension

House Republicans on Wednesday approved a Congressional Review Act resolution nullifying two key Biden administration student debt relief initiatives. This includes President Biden’s unprecedented one-time student loan forgiveness plan, which — if allowed to proceed — would provide tens of millions of borrowers with $10,000 or $20,000 in one-time debt relief. That plan has been held up for months in a drawn-out legal battle, which is now before the Supreme Court. The GOP-led resolution would also repeal Biden’s most recent extension of the student loan pause, which has suspended most federal student loan payments and interest through this summer.

“President Biden’s so-called student loan forgiveness programs do not make the debt go away, but merely transfer the costs from student loan borrowers onto taxpayers,” said Rep. Bob Good (R-Va.), one of the lead cosponsors of the repeal effort, in a statement in March when the initiative was first unveiled by Republican leaders. “Congress should stop these unilateral actions, and I am proud to lead the fight in the House to hold President Biden accountable for his reckless, unfair, and unlawful student loan proposal.”

The Congressional Review Act, or CRA, allows Congress to nullify recently-enacted federal rules and programs. CRA resolutions only require simple majority votes in the House and Senate for congressional approval.

Groups Warn Student Loan Forgiveness Approvals Could Be Reversed

Advocacy groups are sounding the alarm that the Republican-led repeal effort could have devastating impacts for borrowers. In addition to eliminating Biden’s one-time debt relief plan, the reversal of Biden’s extension of the student loan pause could cause many borrowers who already received student loan forgiveness under other programs to have their loan forgiveness reversed, and their loans reinstated.

That’s because the student loan pause period can count as credit toward student loan forgiveness under the Public Service Loan Forgiveness (PSLF) and Income Driven Repayment (IDR) programs. Borrowers who received enough PSLF or IDR credit during Biden’s most recent extension of the student loan pause to reach the threshold required for student loan forgiveness had their balances discharged.

But if the Republican-led repeal effort is successful, thousands of borrowers could have those loan forgiveness determinations undone. A new analysis by the Student Borrower Protection Center (SBPC) and the American Federation of Teachers estimates that upwards of 260,000 public service borrowers who received student loan forgiveness through PSLF during the last several months could have their loans reinstated if the initiative becomes law. And two million additional borrowers who received PSLF and IDR credit associated with the current extension of the student loan pause could have that credit nullified, forcing them to be in repayment for longer.

“This is a disaster,” said American Federation of Teachers President Randi Weingarten in a statement on Tuesday. “For years, the AFT and SBPC have fought the damage forced by the Trump Administration on student loan borrowers and their families. Now, MAGA politicians don’t just want to stop that progress, they want to reinstate student debt previously cancelled for more than 260,000 teachers, nurses, firefighters, and others. It’s an immoral clawback of the absolute worst kind.”

Other advocacy groups echoed these concerns. “Overturning the payment pause and forcing borrowers into immediate repayment would be catastrophic. It would inflict harm upon millions of Americans, particularly the most financially vulnerable among us, who are still struggling to recover from the pandemic,” said Cody Hounanian, Executive Director of the Student Debt Crisis Center, in a statement on Tuesday. “The CRA is a shocking abdication of lawmakers’ duty to support the financial health of families nationwide.”

House Republicans pushed back against other critiques that passage of the bill would force borrowers to retroactively make payments covering the voided student loan pause period. “America shouldn’t buy accusations from the Left that H.J. Res. 45 will charge borrowers backpay on interest payments,” said Rep. Virginia Foxx (R-NC) in a speech on the House floor on Wednesday. “It couldn’t be further from the truth. Nowhere in this resolution does it mandate backpay. It is prospective, not retrospective. If anything, it will be Secretary Cardona’s decision to enact backpay.”

Student Loan Forgiveness Repeal Efforts Continuing

With the House’s approval of the CRA resolution, the bill now heads to the Senate. 49 Republican senators have co-sponsored the resolution in that chamber. Democrats hold a slim Senate majority, but it would take just two Democrats to join these Republicans for the measure to pass, and some moderate Democrats have expressed openness to repeal. The CRA only requires a simple majority in the Senate; the resolution is not subject to a filibuster, which typically requires 60 votes to overcome.

However, even if it passes the Senate, President Biden must sign the CRA resolution for it to become law. And this week, the administration indicated that Biden will veto the measure, likely dooming it. A two-thirds majority in both the House and Senate are required to override a presidential veto, a likely insurmountable hurdle given near-even party control in both chambers of Congress.

But GOP-led efforts to repeal Biden’s student loan forgiveness and debt relief plans continue. House Republican leaders passed separate legislation last month nullifying both initiatives in a federal spending bill to raise the national debt limit. That bill has no chance of passing the Senate, but House GOP leadership and President Biden are locked in intense negotiations over a compromise to avert a debt ceiling crisis. With no agreement reached yet, it is not at all clear how student debt relief will be treated.

“We are fighting for the plumber with no student loans and the veteran that sacrificed for the nation, Democrats are bailing out people with master’s degrees in gender studies,” said Rep. Chip Roy (R-TX) in a letter to Republican colleagues this week, urging them to reject any compromise with President Biden over the debt ceiling.

Meanwhile, legal battles over Biden’s initiatives continue to play out in the courts. There are now two legal challenges over the president’s student loan pause extension. And the Supreme Court is expected to separately rule on Biden’s student loan forgiveness plan in just a few weeks.

Further Student Loan Forgiveness Reading

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