House votes to overturn Biden’s student loan-forgiveness program

As the Supreme Court deliberates the future of President Biden’s student loan-forgiveness program, the House voted Wednesday to overturn the plan to cancel more than $400 billion in debt, as well as restart loan payments for tens of millions of borrowers.

The 218-to-203 vote fell largely along party lines, with two Democrats—Reps. Jared Golden of Maine and Marie Gluesenkamp Perez of Washington state—joining Republicans in endorsing a resolution to scrap the president’s plan to cancel up to $20,000 of federal student debt per eligible borrower. The measure would also end the pause on federal student loan payments, a policy first introduced by the Trump administration in response to the coronavirus pandemic more than three years ago.

The resolution also would prevent the Education Department from pursuing similar policies in the future.

The measure now heads to the Senate, but Biden has already threatened a veto if it passes. Still, the vote shows the additional scrutiny that could await any future student loan policy from the administration.

“Student loan borrowers are responsible for the debt they incurred,” Rep. Bob Good (R-Va.), who introduced the resolution, said on the House floor Wednesday. “Congress must reclaim its power and act to stop the unilateral action of President Biden that is exacerbating the higher education financial crisis.”

But Rep. Robert C. “Bobby” Scott (D-Va.) said the resolution would “trigger a wave of delinquencies and defaults for our most vulnerable borrowers. Intentionally or not, this resolution would create chaos for borrowers and their families as well as the loan servicers.”

Although Biden established the forgiveness program through an executive order, the Government Accountability Office said in March that the policy and the student loan payment pause are rules subject to the Congressional Review Act, which lets lawmakers overturn recent regulatory actions of federal agencies with a simple majority vote in both chambers. The GAO decision cleared a path for Republicans to take aim at one of the president’s signature economic programs.

Republicans can force a vote on the Senate floor. But the timing is unclear as the chamber is not in session this week and the measure could face an uphill battle in the Democratic-led Senate.

Although Sens. Joe Manchin III (D-W.Va.) and Jon Tester (D-Mont.) have criticized the debt relief plan, it’s unclear whether they will join the Republican effort to dismantle the program. Tester’s office said he is taking a look at the resolution, while Manchin’s office declined to comment.

At a briefing Wednesday, White House press secretary Karine Jean-Pierre reaffirmed that Biden will veto the resolution if it succeeds and chastised Republicans for trying to undermine his policy. “Let’s be clear—this is not about cutting wasteful spending for Republicans and it never has been. The same Republican lawmakers objecting to student debt relief are refusing to cut billions of dollars in handouts to Big Oil,” Jean-Pierre said.

Biden’s loan forgiveness plan, which he unveiled in August, would affect more than 40 million borrowers, about half of whom would see their balances wiped clean. It would eliminate up to $10,000 of student debt for borrowers earning up to $125,000 annually, or up to $250,000 for married couples. Those who received Pell Grants, a form of financial aid for low- and middle-income students, are eligible for an additional $10,000 in forgiveness.

The debt relief program, which was contested by multiple lawsuits, already faces a formidable challenge at the Supreme Court. During arguments in February, conservative justices seemed highly skeptical that the president has authority from Congress to provide sweeping loan cancellation. Biden insists his administration has the authority to forgive student loan debt under the Higher Education Relief Opportunities for Students Act of 2003. The law allows the education secretary to waive or modify loan provisions in response to a national emergency, such as the coronavirus pandemic.

Wednesday’s vote arrives as the Biden administration is contending with legal challenges to the ongoing payment pause. While the moratorium was first implemented and extended because of economic upheaval caused by the pandemic, the Biden administration in November also cited the legal challenges to the forgiveness plan when it announced a new extension.

Private lender SoFi filed a lawsuit in March, arguing that the latest extension is unlawful and harms its student loan refinancing business. The conservative nonprofit Mackinac Center for Public Policy also sued, saying the payment moratorium amounts to government overreach and undermines the power of the congressionally approved Public Service Loan Forgiveness as a recruiting tool. Both cases are ongoing.

As it stands, the Education Department said student loan payments will resume 60 days after the Supreme Court hands down a decision. Education Secretary Miguel Cardona told members of Congress this month that the department is “preparing to restart repayment because the emergency period is over.”

For the last three years, the Education Department has suspended student loan payments without accrual of interest, saving borrowers some $5 billion a month in interest. Each month of suspended payments has counted toward loan forgiveness for borrowers in public-service jobs, helping many achieve or move closer to debt cancellation. But advocacy groups say the resolution will upend those benefits.

“Tens of millions of people will be immediately hit with bills for past due interest charges, courtesy of congressional Republicans,” Mike Pierce, executive director of the Student Borrower Protection Center, said on a call with reporters Tuesday. “Amid record inflation … this is exactly the wrong time to saddle working families with unexpected bills as part of a half-baked political stunt.”

Congressional Republicans say those concerns are unfounded. Rep. Virginia Foxx (R-N.C.), chairwoman of the House Education Committee, said the conclusion drawn by advocacy groups “is not based in reality or historical or legal precedent.”

She noted in a statement that the Congressional Budget Office did not factor in any increased revenue from retroactive interest payments in its estimates of the impact of the resolution. The Congressional Budget Office said last week that the resolution would lower the deficit by $320 billion over the next decade due to future repayments of principal and interest on student loans.

“If the nonpartisan CBO expected the resolution to work the way the Left is saying there would be a larger cost saving,” Foxx said. “CBO’s cost estimate did not include additional savings that would have accrued if this resolution required borrowers to make retroactive payments for the years of the repayment pause.”

At a House Education Committee hearing Wednesday, Undersecretary of Education James Kvaal would not say whether the resolution would force the department to collect back interest or payments, but said the measure would be disruptive.

“I’ve seen different legal opinions about whether it is retroactive or exactly how it would affect borrowers,” Kvaal said, “but I think it is clear that it would be very disruptive and very confusing and make it challenging for borrowers to return to repayment successfully.”