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As a subscriber you can listen to articles at work, in the car, or while you work out. Subscribe NowThe Senate on Thursday approved a Republican-led resolution to strike down President Biden’s plan to forgive more than $400 billion in student loans.
The 52-46 vote, arriving a week after the House passed the measure and as the Supreme Court considers the legality of the relief plan, also would restart loan payments for tens of millions of borrowers that have been on pause since early in the coronavirus pandemic. The resolution also would prevent the Education Department from pursuing similar policies in the future.
While Biden has promised to veto the bill, the vote in the Senate, in which two Democrats and an independent sided with Republicans, shows the divisiveness of the student loan policy and the difficulty of getting any future plan through Congress.
It became clear the resolution could clear both chambers after Sens. Joe Manchin III (D-W.Va.), Jon Tester (D-Mont.) and Kyrsten Sinema (I-Ariz.) voted to advance the bill earlier this week. All three have been critical of Biden’s debt relief policy but had not previously said whether they would join the Republican effort to dismantle the program.
“There are already more than 50 existing student loan repayment and forgiveness programs aimed at attracting individuals to vital service jobs,” Manchin said in a statement Wednesday after advancing the measure to the floor. “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.”
But on the Senate floor Thursday, Sen. Robert Menendez (D-N.J.) argued the congressional resolution “increases the yoke of student loan debt and sets up borrowers to fail.”
Unveiled in August, Biden’s loan forgiveness plan would eliminate up to $10,000 of federal student debt for borrowers earning up to $125,000 annually, or up to $250,000 for married couples. Recipients of Pell Grants, a form of financial aid for low- and middle-income students, are eligible for an additional $10,000 in forgiveness.
The program has faced many legal challenges and the Supreme Court is set to issue a ruling on its legality before the end of June.
Meanwhile, the Biden administration is fighting separate legal challenges to the ongoing payment pause from private lender SoFi and the conservative not-for-profit Mackinac Center for Public Policy. The moratorium was first introduced by the Trump administration in response to the coronavirus pandemic more than three years ago, but spawned lawsuits after the Biden administration in November also cited the legal challenges to the forgiveness plan in announcing another extension.
Legislation to suspend the debt ceiling and limit federal spending could render those lawsuits moot.
A provision in the legislation, which passed the House this week, codifies the Education Department’s plan to resume student loan payments 60 days after the Supreme Court hands down a decision or on Sept. 1. The Senate is slated to vote on the debt ceiling deal this week.
The moratorium 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. Menendez and other congressional Democrats warned that the resolution will undo those benefits, a charge Republicans have denied.
To end the payment pause and sideline Biden’s debt relief program, Republicans used the Congressional Review Act, which lets lawmakers overturn recent regulatory actions of federal agencies with a simple majority vote in both chambers. Although the president created the cancellation program through an executive order, the Government Accountability Office said in March that the policy and the student loan payment pause are subject to the CRA.
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“the congressional resolution “increases the yoke of student loan debt and sets up borrowers to fail”” The students should have thought of that when they borrowed the funds. Nobody forced them to borrow the funds.
But it’s cool when already-wealthy business owners take out gigantic loans (to the tune of millions of dollars each for many of them) from the Federal government and have them forgiven, right? Always helping those who already have the means to help themselves. Repayments for thee, but not for me…
Yes – because somehow we are legally allowing 17 year old minors to sign up for crippling debt.
We set our working class citizens up to fail and call it irresponsible?
Don’t be obtuse Anthony – student loans are predatory and the government gets to change the rules to whatever suits them
So let’s fix the loan program–not forgive debt that someone signed a legal contract to pay back. If I take out a mortgage and don’t pay it back, the creditor will take my home back. Forgiving the debt doesn’t fix the problem. It is grossly unfair to those of us who WISELY didn’t take the 4-year on-campus experience because we didn’t want the burden of the payments. Nobody held a gun to these people’s heads and made them sign up for what they borrowed.
Most Americans would be good with low-interest loans; no compound interest; and even making the payments a bit smaller and stretched out over a longer period of time. And there are people who are upside down with their loans due to compound interest–those people should get some relief.
American needs to get back to being fiscally responsible from the ground up.
Unless the votes went Biden’s way, this vote means noting. SCOTUS has already decided they will take up this issue.