A Republican-led bill to undo President Joe Biden’s Student Loan forgiveness plan — already on hold until the Supreme Court
kills itcarefully considers its merits and rules to kill it later this month — passed in the Senate yesterday, although Biden has already promised to veto it. Senate Republicans were joined in the 52-46 vote by two right-leaning Democrats — Joe Manchin (D??- Gob Coal) and Jon Tester (D-Montana) — as well as right-leaning former Democrat Kyrsten Sinema (I-Arizona).
A very unhappy former constituent of Sen. Tester tweeted thusly on hearing the news:
What Good Arguments Will Supreme Court Ignore In Student Debt Relief Case?
In addition to killing off Biden’s debt-relief plan, which would forgive up to $20,000 in federal student loans for folks who received Pell grants while in college, or up to $10,000 for borrowers who didn’t, the bill would have immediately ended the pandemic pause on repayment and interest for most federal student loans. The latter provision was somewhat redundant anyway, since the loan repayment pause will end on August 30 as part of the debt limit bill that Biden will sign today. Even without legislation, the pause was inevitably going to end because the pandemic state of emergency as ended; the debt ceiling bill just makes good and sure that the Education Department stops being nice to borrowers ASAP.
Manchin, always on the lookout to pander to the Right, called the debt relief plan “reckless” because it would add to the deficit in very bad ways that aircraft carriers and oil subsidies do not. In a statement, Manchin said that giving any relief to folks burdened with student debt would force “hard-working taxpayers who already paid off their loans or did not go to college to shoulder the cost.” Considering that without the debt relief, many borrowers will default anyway, it’s not exactly the most logical stance, but again, it plays well to class resentment against educated snobs who used a student loan to get vocational training. But you know how it is with “education” — they probably sneak some Marxism in there while training people to be dental technicians.
The bill was able to pass in the Senate with a simple majority because it was introduced under the Congressional Review Act, which empowers Congress to overturn executive branch rules and regulations it doesn’t like. The CRA was also why the bill could go to a vote without being brought up by Majority Leader Chuck Schumer.
In a statement last month, the White House made clear that if the bill passed, Biden would veto it. The statement said the bill was “an unprecedented attempt to undercut our historic economic recovery and would deprive more than 40 million hard-working Americans of much-needed student debt relief, ” adding that it would “weaken America’s middle class.”
Nearly 90 percent of the relief provided by the Department of Education would go to Americans earning less than $75,000 per year, and no relief would go to any individual or household in the top 5 percent of incomes. Americans should be able to have a little more breathing room as they recover from the economic strains associated with the COVID-19 pandemic.
Reiterating the argument the administration made before the Supreme Court in February, the White House noted that Congress gave the Education Department the authority to forgive loans during a national emergency, and that previous administrations have done exactly that, so get outta here.
Now, we just have to wait and see what the Supreme Court decides. Given the Court’s tendency to do whatever it damn well pleases regardless of precedent, we’re not getting our hopes up too much, damn it. But hey, the Supremes have surprised us before.
As Yoda Said, There is Another
I Got My Student Loans Ready For Joe Biden’s Big Income-Based Forgive-A-Thon And You Should Too
Finally, we’ll add that the text of the bill Biden plans to veto, and the upcoming Supreme Court decision, only concern the one-time debt forgiveness program Biden announced last August.
That’s kind of a big deal, because as we mentioned a few months back, there’s also a separate, long-extant loan forgiveness program for folks enrolled in income-driven repayment plans (IDR), under which borrowers can have the balance of their loans forgiven after making payments for 20 years for undergraduate loans, or 25 years for grad school loans. That program is unaffected by the upcoming Court ruling because it was created by Congress and predates the Biden administration.
There’s also the better-publicized Public Service Loan Forgiveness (PSLF) program, which forgives student debt for teachers and other government workers after they’ve made payments for 10 years. (Although not in practice.)
Even better, the Education Department has improved the terms of those programs to make up for some longtime shady behavior by private loan servicers, who would often talk people into deferring their loans (which continued to accrue interest) instead of letting them know about income driven repayment plans. You can find more details in our earlier article or straight from the studentaid.gov website. The upshot is that the Ed Department will be reviewing millions of accounts and adjusting the time necessary to qualify for forgiveness of loans. More than 3.6 million borrowers will get at least three years of credit toward fulfilling their obligation, and many will have their loan balances wiped out by the adjustment. The adjustments will also apply to those PSLF loans, too, and to a lot of loans taken out by parents for students.
To qualify, you may need to consolidate your existing loans into an IDR plan, and here too there’s some terrific news: The initial deadline to qualify had been May 1, but the Education Department has extended that to the end of 2023.
For more information, and to start the process, check thestudentaid.gov website here. And if you’re completely at sea, the folks at the Education Department’s Student Aid help desk (1-800-433-3243) are astonishingly smart and helpful.
[NBC News / Politico / StudentAid.gov]
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