Senate votes to block student loan forgiveness but Biden vows to veto bill
The Senate approved a House resolution on Thursday to repeal Biden’s student loan forgiveness plan.
The vote came during a week when student loans have been at the center of public debate. The forgiveness plan faces sharp scrutiny in Congress and the supreme court. And the choice to resume debt repayments, which have been on pause since March 2020, has been tied up in the high-profile deal to lift the debt ceiling and avert a dangerous national default.
The decision on Thursday would cancel Joe Biden’s plan to forgive up to $10,000 of debt for most borrowers and $20,000 for Pell grant recipients. With 52 yes votes and 46 no votes, senators kept largely within party lines with a few exceptions. President Biden has vowed to veto the bill.
But Biden’s plan faces its biggest challenge in the US supreme court, which has a conservative majority and is expected to deliver its ruling later this month.
“Higher education in the US has traditionally not been so central to so many large public debates,” said Jon Fansmith, senior vice president of government relations at the American Council on Education.
“I think the fact you are seeing efforts to address loan forgiveness and student loan repayment as part of the debt ceiling deal, as part of large government spending bills, speaks to the growing importance of college education in American politics.”
Plan faces ire from Republicans and some moderate Democrats
In an effort to curb government spending, Republicans have railed against student loan forgiveness since Biden made it one of his priorities.
According to CBO estimates, repealing the plan would reduce spending by nearly $320bn in fiscal year 2023 and about $316bn year over year for the next decade.
A small group of Democrats voted in favor of repealing Biden’s plan, including Senator Joe Manchin of West Virginia, who said it would add additional costs on top of existing debt relief programs.
“This Biden proposal undermines these programs and forces hard-working taxpayers who already paid off their loans or did not go to college to shoulder the cost,” Manchin said in a statement on Wednesday.
Democratic senator Jon Tester of Montana and independent senator Kyrsten Sinema of Arizona also voted in favor of repealing Biden’s plan. Two Democrats in the House, which Republicans control by a slim majority, voted in favor of the repeal.
Ruling by a conservative supreme court
Biden has vowed to veto the legislation, but his student loan forgiveness plan isn’t in the clear, as the conservative-majority US supreme court is expected to rule on it this month.
The clearest path for opponents to see the forgiveness program struck down is through the court, according to Fansmith. “This is a court that views this program very skeptically and is likely to overturn it on its merits,” he said.
But he notes that the justices seemed skeptical that the plaintiffs – five states in one case, and two individuals in another – had an appropriate level of standing to bring those cases before the court in the first place.
“The conservative majority in the court would clearly like to strike down the program, but it is not clear, necessarily, that those are the right plaintiffs to bring that case forward,” Fansmith said.
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The courts would then have to uphold the program, he added. “For proponents of loan forgiveness, that’s the thin hope.”
Repayments tied up in debt ceiling debacle
Representative Ayanna Pressley of Massachusetts filed an amendment to the House debt ceiling bill on Tuesday to strike the part that would end the payment pause on 30 August – part of the reason progressive Democrats were hesitant about supporting the bill. But that amendment was not part of the final House-passed version. Pressley was among 46 Democrats and 71 Republicans who voted against the bill on Wednesday.
The Biden administration said it had intended to lift the pause on payments close to the 30 August date.
“This bill does end the payment pause, but very close to the timeframe we were going to end it as an administration when it comes to repayment,” said the director of the Office of Management and Budget, Shalanda Young, during a White House press conference on Tuesday.
However, the White House will not be able to issue further extensions, which the administrations under both Trump and Biden did, Fansmith noted.
Complications to arise after payment pause expires
Passing the deal to avert a national default would also end a current pause on student loan repayments.
The last time borrowers were required to make a student loan payment was in March 2020, according to Fansmith. After the latest extension expires, there could be a slew of new challenges for borrowers and service providers.
“We’ve never taken a three-and-a-half-year pause on repayments, so the possibility of complications is frankly really high,” Fansmith said.
Agencies responsible for overseeing loan repayments could be unprepared to deal with borrowers who haven’t made a payment in more than three years.
Source: The Guardian
