House Attempts to Reverse Student Loan Relief and Forbearance

May 26th, 2023 7:00am PDT

( – 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.