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House votes to cancel Biden’s student loan forgiveness program

As the Supreme Court deliberates the future of President Biden’s student loan forgiveness program, the House voted on Wednesday to reverse the controversial plan to forgive more than $400 billion in debt, as well as restart the loan repayments for tens of millions of borrowers.

The 218-203 vote fell largely in favor of the parties, with two Democrats – Reps. Jared Golden (Maine) and Marie Gluesenkamp Perez (Wash.) – joining Republicans in endorsing a resolution to scrap the plan of the President to forgive up to $20,000 in federal student debt per eligible borrower. The measure would also end the pause on federal student loan payments, a policy first introduced by the Trump administration in response to the coronavirus pandemic more than three years ago.

The resolution would also prevent the Ministry of Education from pursuing similar policies in the future.

The measure is now heading to the Senate, but Biden has already threatened a veto if it passes. Still, the vote shows the extra scrutiny that could await any future student loan policy from the administration.

“Student borrowers are responsible for the debt they have incurred,” Rep. Bob Good (R-Va.), who introduced the resolution, said Wednesday. “Congress must take back its power and act to end President Biden’s unilateral action that is exacerbating the financial crisis in higher education.”

But Rep. Robert C. “Bobby” Scott (D-Va.) said the resolution “would trigger a wave of delinquencies and defaults for our most vulnerable borrowers. Intentionally or not, this resolution would create chaos for borrowers and their families as well as loan servicers.

Although Biden established the pardon program through an executive order, the Government Accountability Office said in March that the policy and suspension of student loan payments are rules subject to the Congressional Review Act, which allows lawmakers to overturn recent regulatory actions by federal agencies by a simple majority vote in either bedrooms. The GAO’s decision paved the way for Republicans to take aim at one of the president’s flagship economic programs.

Republicans can force a vote in the Senate. But the timing is unclear as the chamber is not in session this week and the measure could face an uphill battle in the Democratic-led Senate.

Although the Sens. Joe Manchin III (DW.Va.) and Jon Tester (D-Mont.) have criticized the debt relief plan, it’s unclear whether they will join the Republican effort to dismantle the program. Tester’s office said it was reviewing the resolution, while Manchin’s office declined to comment.

During a Wednesday briefing, White House press secretary Karine Jean-Pierre reiterated that Biden would veto the resolution if it passes and chastised Republicans for trying to undermine his policy. “Let’s be clear – this is not about cutting wasteful Republican spending and it never has been. The same Republican lawmakers who oppose student debt relief refuse to cut billions of dollars in donations to big oil companies,” Jean-Pierre said.

Biden’s loan cancellation plan, which he unveiled in August, would affect more than 40 million borrowers, about half of whom would have their balances wiped out. It would eliminate up to $10,000 in student debt for borrowers earning up to $125,000 a year, or up to $250,000 for married couples. Those who have received Pell Grants, a form of financial aid for low- and middle-income students, are eligible for an additional $10,000 rebate.

The debt relief program, disputed by multiple lawsuits, already faces a formidable challenge before the Supreme Court. During the debates in February, the conservative justices seemed very skeptical about the authority of the president of Congress to radically cancel the loan. Biden insists his administration has the authority to forgive student loan debt under the Higher Education Student Aid Opportunities Act of 2003. The law allows the Secretary of Education to waive or modify loan provisions in response to a national emergency, such as the coronavirus pandemic.

Wednesday’s vote comes as the Biden administration grapples with legal challenges to the ongoing payment pause. While the moratorium was first implemented and extended due to the economic dislocation caused by the pandemic, the Biden administration also cited legal challenges to the pardon plan in November when it announced a further extension.

Private lender SoFi filed a lawsuit in March, arguing that the latest extension is illegal and hurts its student loan refinancing business. The conservative nonprofit Mackinac Center for Public Policy also sued, claiming the moratorium on payments amounts to an excess of government power and undermines the power of the approved by Congress Civil service loan cancellation as a recruitment tool. Both cases are ongoing.

As it stands, the Department of Education has said student loan repayments will resume 60 days after the Supreme Court issues its ruling. Education Secretary Miguel Cardona told members of Congress this month that the department is “preparing to resume reimbursement because the emergency period is over.”

Over the past three years, the Department of Education has suspended student loan repayments with no interest accrual, saving borrowers some $5 billion a month in interest. Every month of suspended payments counted toward loan forgiveness for borrowers in government jobs, helping many to get or get closer to debt cancellation. But advocacy groups say the resolution will upend those benefits.

“Tens of millions of people will be hit with bills for overdue interest immediately, thanks to Congressional Republicans,” Mike Pierce, executive director of the Student Borrower Protection Center, said on a call with reporters on Tuesday. “Amid record inflation…it’s exactly the wrong time to hit working families with unexpected bills as part of a half-baked political stunt.”

Congressional Republicans say those concerns are unfounded. Representative Virginia Foxx (RN.C.), chair of the House Education Committee, said the conclusion reached by advocacy groups “is not based on reality or historical or legal precedent.”

She noted in a statement that the Congressional Budget Office did not factor any increases in revenue from retroactive interest payments into its estimates of the resolution’s impact. The Congressional Budget Office said last week that the resolution would reduce the deficit by $320 billion over the next decade due to future principal and interest repayments on student loans.

“If the nonpartisan CBO expected the resolution to work as the left says, there would be greater cost savings,” Foxx said. “CBO’s cost estimate did not include the additional savings that would have been realized if this resolution required borrowers to make retroactive payments for the years of the repayment pause.”

During a House Education Committee hearing on Wednesday, Undersecretary of Education James Kvaal did not say whether the resolution would require the department to collect interest, but said the measure would be disruptive.

“I’ve seen different legal opinions on whether it’s retroactive or exactly how it would affect borrowers,” Kvaal said, “but I think it’s clear that it would be very disruptive and very confusing and that it would be difficult for borrowers to revert to repayment successfully.


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