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Republican Effort To Repeal Student Loan Forgiveness and Payment Pause Could “Wreak Havoc” On Borrowers, Warns Group

A student loan borrower advocacy organization is warning that a Republican effort to repeal signature Biden administration student debt relief initiatives, including broad student loan forgiveness and an extension of the payment pause, could be disastrous for borrowers if enacted. 

President Biden has relied almost exclusively on executive action to implement a broad array of student loan relief programs, including mass student debt cancellation of up to $20,000; temporary waivers of normal rules governing Public Service Loan Forgiveness (PSLF) and Income-Driven Repayment programs; and another extension of the ongoing freeze on most federal student loan payments and interest. 

But last month, the Government Accountability Office (GAO) issued a formal determination that the Biden administration’s executive actions are reversible under the Congressional Review Act (CRA). The CRA is a federal statute that allows Congress to repeal recently-enacted federal rules and regulations. The CRA offers an expedited legislative process for repeal, and repeal legislation is not subject to a Senate filibuster, allowing Congress to pass a CRA resolution with simple majorities in the House and Senate. 

House and Senate Republicans quickly unveiled CRA resolutions to repeal Biden’s executive-action-based student loan forgiveness and the latest extension of the student loan pause. The resolution had nearly 40 GOP cosponsors in the Senate, and congressional Republican leaders have vowed to proceed quickly with a repeal effort.

Borrower advocacy group warns of “catastrophic consequences” if repeal effort succeeds

The Student Borrower Protection Center (SBPC), a nonprofit advocacy organization for student loan borrowers, released a report this week warning of dire consequences if the repeal effort is successful.

Chaos and the impact on PSLF payment counts

In addition to abruptly forcing nearly 40 million borrowers back into repayment with little or no notice, “the resolution would sow chaos among many of the other critical student loan programs which are intertwined with the payment pause—such as income driven repayment (IDR) and Public Service Loan Forgiveness (PSLF),” warned the SBPC. 

“The resolution could force [the Education Department] to unwind the credits towards forgiveness that had been earned by low-income borrowers and public service workers since the last extension of the payment pause, with potentially catastrophic consequences for borrowers with loans forgiven under PSLF.” 

That’s because the time spent in the ongoing student loan payment pause can count toward student loan forgiveness under both PSLF and IDR for many borrowers, even though no payments are required. If Biden’s latest extension of the student loan pause is reversed, so could those months of credit towards student loan forgiveness associated with Biden’s most recent extension. Some borrowers “could see their PSLF relief undone and their loans reinstated,” warned the SBPC.

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Racial wealth disparities and economic consequences

The SBPC also warned that repealing Biden’s signature student loan forgiveness initiative — which would cancel $10,000 or $20,000 in federal student loan debt for millions of borrowers — would “will ensure that the racial wealth disparities, defaults and delinquencies, and broader cascading economic consequences associated with the student debt crisis will continue to worsen.” 

That initiative has already been blocked by federal courts in response to separate legal challenges. The U.S. Supreme Court heard oral arguments on the challenges in February, and a ruling is expected this summer.

Education Secretary Cardona criticizes Republicans

The Biden administration has been highly critical of the Republican efforts to repeal the student debt relief programs. “Republicans in Congress represent millions of borrowers who have applied for student debt relief. It’s a shame for these borrowers—the overwhelming majority of whom make less than $75,000 a year—and their families that their representatives are working so hard to deny them critical relief,” said Education Secretary Miguel Cardona in a statement last week. 

“Instead of working to support hardworking students and borrowers, Republicans in Congress would rather give trillions of dollars in tax breaks to the super wealthy and the biggest corporations. The Biden-Harris Administration will continue to fight to deliver much-needed support to borrowers trying to get back on their feet after the economic crisis caused by the pandemic.”

Related: 3 Looming Threats to Student Loan Forgiveness

GOP effort to repeal Biden’s student loan debt relief plans face challenges 

The CRA resolutions repealing Biden’s student loan forgiveness and payment pause plans could pass the House, where Republicans hold a narrow majority. In the Senate, however, Democrats hold a slim majority, complicating Republican efforts to succeed in that chamber. However, only two Democratic senators would need to defect for the resolution to pass the Senate, and there are signs that at least a handful of moderate Democrats in swing states may be open to voting for the Republican-led resolution. 

But even if the CRA resolution winds up passing both the House and the Senate, it would have to be signed by President Biden to become law. 

It is highly unlikely that Biden would sign legislation repealing student loan debt relief efforts that his administration has fought to enact, particularly given the administration’s spirited defense of both programs before the Supreme Court in February. The statement released by Secretary Cardona last week suggests that Biden would not be amenable to these efforts.

Instead, Biden would be far more likely to veto the CRA resolution, preventing it from becoming law. In theory, a two-thirds supermajority in each chamber of Congress could override Biden’s expected veto. 

But with both chambers split nearly evenly, a large number of Democrats in both the House and the Senate would have to cross the aisle to achieve the supermajority necessary for a veto override. Although no formal whip counts have been released yet, that is highly unlikely to occur. 

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