May 26th, 2023 7:00am PDT
(PenniesToSave.com) – A bill called the Congressional Review Act (CRA) has been approved by the US House of Representatives. This bill intends to reverse the suspension of student loan payments and prevent the president’s plan for forgiving student debt.
The bill received a 218-203 vote, with a few Democratic representatives seemingly supporting it.
If passed, the bill would compel the Education Department to undo the forbearance and interest waivers that have been in effect since September 2022 as part of the government’s Covid-19 response. It would also block President Joe Biden’s plan to cancel student debt up to $20,000, irrespective of the Supreme Court’s decision on the program’s legality.
If the bill is approved by the Senate, the president has made it clear that he will veto it. This means that around 40 million borrowers of student loans would be held accountable for their remaining balances and any accumulated interest fees.
Advocates have expressed concerns that the proposed resolution could potentially reinstate the debt for borrowers who had previously received loan cancellation through the public service loan forgiveness (PSLF) program.
Eden Iscil, the public policy manager at the National Consumers League, warns that this could impact individuals who had their debts forgiven through established programs such as Public Service Loan Forgiveness. Iscil emphasizes that reinstating these debts would worsen the difficulties of resuming monthly payments, especially in a high inflation environment and without the support of the president’s debt cancellation plan.
A recent report from the American Federation of Teachers (AFT) and the Student Borrower Protection Center (SBPC) emphasizes the potential negative impact that the CRA resolution could have on public service workers who are already struggling with student debt.
At a press conference, Mike Pierce, executive director of the Student Borrowers Protection Center, emphasized that the CRA would have wide-ranging effects. Not only would it impact the Public Service Loan Forgiveness (PSLF) program, but it could also hinder President Biden’s plan for student loan cancellation. Additionally, existing debt relief measures could be reversed, rendering student loan policies implemented since 2022 invalid.
If the CRA resolution is passed, approximately 268,660 public service workers who had their debts cancelled between September 2022 and March 2023 through the public service loan forgiveness program would owe $19.5 billion in debt again, as stated in the AFT/SBPC report report.
If the measure is approved, it could reduce deficits by $316 billion until 2033, according to the Committee for a Responsible Federal Budget (CRFB). However, CRFB President Maya MacGuineas suggests that the administration should instead pursue a bipartisan approach for true system reform.
However, the ongoing debate between supporters and critics may not have significant consequences. Mark Kantrowitz, an author and expert on student loans, expressed doubt about the bill’s chances of passing in the Senate or withstanding a presidential veto, stating to Yahoo Finance.
Prior to the House vote, the White House reiterated its stance during a press briefing. Press Secretary Karen Pierre emphasized President Biden’s firm position against the bill and stated that he would exercise his veto power to reject it.