Acting before Supreme Court ruling, House seeks to block Biden’s student loan forgiveness plan

The U.S. House of Representatives is voting Wednesday on a bill that would repeal President Joe Biden’s plan for mass student debt relief.

The plan, which would forgive up to $20,000 in student loans for Americans with individual incomes of less than $125,000, is on hold because of two challenges now being considered by the Supreme Court. The high court typically issues its decisions for the term by the end of June.

But Republicans in Congress are determined to block the forgiveness plan before the court rules. The legislation would also restart payments on student loans, which have been on pause since the onset of the pandemic.

Biden’s plan would contribute to inflation, said Rep. Virginia Foxx, R-North Carolina, chairwoman of the House Committee on Education and the Workforce, during a debate over the resolution Wednesday. It would in turn hurt “working Americans” most.

“Democrats want future taxpayers and hardworking Americans to foot the bill,” she said. “Americans shouldn’t buy it. … Those who will pay: those without degrees and those who can afford to pay their debt.”

This will be the first time Congress votes on a bill exclusively seeking to block Biden’s plan. GOP members in the House already voted to kill Biden’s plan as part of a bill to raise the debt ceiling last month.

Here’s what you need to know.

Americans are split on debt forgiveness as Supreme Court gears up to rule on student loan cases

What’s up with the Supreme Court case?

The court in February heard arguments on two cases challenging the plan, which would cancel either $10,000 and $20,000 in student loan debt for tens of millions of Americans. Roughly 16 million of the more than 25 million borrowers who applied for this forgiveness last fall were approved before it was put on hold pending the litigation.

The Supreme Court expected to announce its decision within the next month or so.

Republicans already tried to block forgiveness in debt ceiling plan

Republicans attempted to repeal Biden’s program as part of a larger package of proposals earlier this spring to lower the nation’s debt ceiling, an issue that remains unresolved.

The GOP-led House passed the bill, which included other proposed spending cuts. But it never made it out of the Democrat-controlled Senate.

House passes GOP debt limit plan, which would cut Biden’s student loan forgiveness proposal

Some Democrats skeptical of mass student debt relief

The Republican-sponsored legislation to block Biden’s mass student debt relief plan could face a similar fate. If it makes it out of the House, it would again face the Democrat-controlled Senate. The White House has already said it would veto the proposal.

“This resolution is an unprecedented attempt to undercut our historic economic recovery and would deprive more than 40 million hard-working Americans of much-needed student debt relief,” the White House said.

Democrats generally have decried the resolution as a greedy and misinformed attempt to deny much-needed financial relief to tens of millions of Americans. “We’ve repeatedly seen how wiling our colleagues on the other side of the aisle are to put politics over people and special interests over students and this (resolution) is no different,” said Rep. Suzanne Bonamici, D-Oregon, during debate Wednesday ahead of the vote.

At least 43 million Americans would be eligible for relief under Biden’s plan, Democrats stressed, with the vast majority (90%) earning less than $75,000. To frame this as a handout to the wealthy is false, they said.

But some moderate Democrats, including Sens. Joe Manchin of West Virginia and Catherine Cortez Masto of Nevada, have expressed skepticism about mass relief. The plan is estimated to cost about $300 billion.

What does all of this mean for the pause on student loan payments?

If the bill becomes law, it would also nullify the moratorium on student loan payments. The payment pause was first enacted and extended under the Trump administration, after which it was extended repeatedly under Biden.

Otherwise, the pause – which also faces its own lawsuits – will likely end later this year.

The Biden administration has stated payments will kick back in two months after June 30 or the day the Supreme Court issues its ruling, whichever happens first.

But as reported by POLITICO, internal Education Department documents indicate October will be the first month borrowers are expected to resume payments. According to the documents, department officials anticipate needing several months to transition back into payments.

Plan B to cancel student loan debt? The White House won’t go there even as pressure mounts

What about other forms of student debt forgiveness?

The Biden administration has tried to relieve student loan debt through a variety of avenues, including public-service loan forgiveness and what’s known as Borrower Defense to Repayment.

The latter program concerns borrowers who were defrauded by their colleges. These tend to be for-profit or career-training institutions.

As part of a settlement of one such class-action case, the Education Department recently discharged some $6 billion in student loans for more than 200,000 defrauded borrowers. Now, the Republican chairs of the House education and oversight committees are requesting documents to ensure the department’s settlement agreement is legal.

Public-service loan forgiveness, which pertains to people who’ve worked for at least a decade in industries such as public education and health care, could also be hampered by the bill.

In early May, the department announced it had forgiven $42 billion in student loan debt for public service workers.

But a recent analysis by the Student Borrower Protection Center and American Federation of Teachers suggests as many as 268,600 public service workers who had their loans forgiven at some point between September 2022 and March 2023 could have their debt reinstated.

“This is a disaster,” AFT President Randi Weingarten said in a statement. “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.”

Should colleges be held accountable as student loan debt spirals?

Contact Alia Wong at (202) 507-2256 or Follow her on Twitter at @aliaemily.

This article originally appeared on USA TODAY: House set to vote on killing Biden’s student loan forgiveness

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