A bill that would block President Joe Biden’s student debt forgiveness program and claw back halted student loan payments was voted in favor of by the House of Representatives.
Called the Congressional Review Act (CRA), the bill was passed by a 218-203 vote. The measure appeared to be supported by at least two Democratic representatives.
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The CRA would involve requiring the Education Department to undo months of forbearance and waived interest charges that were part of the COVID-19 pandemic federal response. Additionally, the bill would inhibit the enactment of Biden’s cancellation of student loan debt.
The measure would leave 40 million student loan debtors with past-due balances on their loans, as well as newly added interest charges. The president has vowed to veto the bill if it passes the Senate.
“Voting in favor of CRA is really a pretty extraordinary slap in the face to representatives’ constituents,” Abby Shafroth, a senior attorney with the National Consumer Law Center, told Yahoo Finance. “It would not only break a promise the government has already made to constituents to provide them life-changing debt relief, but also increase their student loan balances right now by undoing past months of 0% interest and retroactively charging interest for that time.”
Others are concerned that the resolution would re-establish loans for debtors who were allotted debt forgiveness under the public service loan forgiveness (PSLF) program.
“Many individuals whose loans were discharged under longstanding forgiveness programs, such as Public Service Loan Forgiveness, could see their debts reinstated,” said public policy manager at National Consumers League, Eden Iscil, in a statement to Yahoo Finance. “This would all be in addition to the dangers of restarting monthly payments during high inflation and without the president’s debt cancellation.”
The Student Borrower Protection Center (SBPC) and the American Federation of Teachers (AFT) published a new report Tuesday exhibiting how the CRA resolution would result in significant harm to public service employs who have taken out student loans for their education.
“The CRA would impact PSLF, block Biden’s student loan cancellation, and will roll back debt relief already delivered,” Mike Pierce, executive director of the Student Borrowers Protection Center, said in a press conference. “It would strike down an existing set of programs having an immediate impact on borrowers by invalidating student loan policies since 2022.”
According to the SBPC/AFT report, from September 2022 through March 2023, roughly 268,660 public service workers who were granted student loan cancellation would have a cumulative, reinstated $19.5 billion debt because of the CRA.
On the flipside, if the measure passed, the Committee for a Responsible Federal Budget estimated it would reduce deficits by $316 billion through 2033. CRFB President, Maya MacGuineas stated that the administration should “find a bipartisan path forward that truly reforms the system.”
In a press briefing before the House vote on Wednesday, the White House echoed its stance.
“And know this: President Biden won’t stand for it,” White House Press Secretary Karen Pierre said. “He will veto this bill.”
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