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Lawmakers act on measure to scuttle student loan forgiveness plan

Republicans framed their effort in the context of Congress’ ongoing debt battle, while Democrats said it would hurt working-class borrowers.

WASHINGTON (CN) — Amid a partisan skirmish, House Republicans on the lower chamber’s education panel voted Wednesday in what amounts to a congressional thumbs-down on the Biden administration's student loan forgiveness plan.

The Department of Education in October officially rolled out its loan forgiveness program aimed at scrubbing higher education debts that swathes of the American public owe the federal government. The White House has framed its loan cancellation scheme as an effort to relieve economic pressure on borrowers brought on by the Covid-19 pandemic.

Although the Education Department has already approved millions of debt relief applications, it remains to be seen whether borrowers will have their federal loans erased — the Supreme Court should soon rule on two separate lawsuits from plaintiffs who allege the federal government is abusing its power. President Biden has left open the possibility that legal action could render his loan forgiveness program moot.

Amid that uncertainty, Republicans on the House Committee on Education and the Workforce sought Wednesday to potentially hammer another nail into the coffin of student loan cancellation by clearing a resolution that, if passed by both chambers of Congress, would do away with the White House’s program.

Sponsored by Virginia Congressman Bob Good, the measure, which the committee passed on a 24-18 party line vote, would also put a stop to years of government-sanctioned delays on existing student loan payments, instituted in 2020 at the start of the Covid-19 pandemic.

During a committee markup, Republicans doubled down on claims that the loan forgiveness plan would benefit only wealthy, college-educated Americans.

“Student loan forgiveness is nothing more than a transfer of wealth from those who willingly took on debt to those who did not, or who had the grit to pay off their loans,” said North Carolina Representative Virginia Foxx, who chairs the panel. “The problems that plague postsecondary education cannot be solved by one-time debt jubilees.”

Congressman Good, the resolution’s sponsor, added that the White House had overstepped its authority and taken spending power away from Congress. “This student loan transfer scheme doesn’t make the debt go away,” the Virginia lawmaker said. “It shifts the costs from borrowers and transfers it to hardworking American taxpayers.”

Foxx and her GOP colleagues also argued that, amid a congressional standoff over the federal debt ceiling, the government can’t afford to bail out borrowers.

Republican lawmakers argued that the real issue facing Americans in higher education was the high cost of college tuition, rather than debt accrued as a result.

“Republicans support individuals pursuing postsecondary education, if that’s what they want to do,” Foxx said. “But colleges have not been held accountable for far too long. The solution to the challenges facing our system isn’t to just forgive debt but rather to crack down on the system to ensure students aren’t being taken advantage of.”

Committee Democrats pointed, meanwhile, to what they said was a hypocritical stance from Republicans. Despite bristling at student loan forgiveness now, the GOP ardently supported debt cancellation for small businesses and backed tax cuts for individuals and corporations under the Trump administration.

“Many of my colleagues on the other side have argued that we cannot afford the [loan forgiveness] plan, and have called it a giveaway,” said Virginia Democrat Bobby Scott, the education committee’s ranking member. “That’s just a matter of priorities.”

Minnesota Representative Ilhan Omar pushed back on Republican claims that loan cancellation would only benefit wealthy Americans, pointing out that, under the White House plan, 90% of debt relief would go to borrowers who earn less than $75,000 per year.

Omar also complained that the student loan repayment pauses, enacted under the Trump administration, had enjoyed bipartisan support until recently.

“The reality is that the payment pause has been a critical economic lifeline for tens of millions of borrowers,” the Minnesota Democrat said. “Student loan borrowers and their families should not be used as a political pawn.”

California Congressman Mark Takano also blasted Republicans for what he saw as an about-face on student loan payment pauses and said that Congress should be taking action to reform the federal student loan program rather than dismantling the Biden administration’s provisions.

“I find the notion of this committee action today disheartening,” Takano said. “As we wait to hear the final say from the Supreme Court ruling, we should be taking steps to help both current and future borrowers.”

If it survives the court challenge, the White House’s debt forgiveness plan would cancel student loans for Americans making less than $125,000 per year. The cancellations would include around $20,000 worth of debt for borrowers who received Pell grants from the federal government and around $10,000 in forgiveness for Americans holding other types of federal loan debt.

The Supreme Court is expected to rule on the program as early as June.

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Categories / Education, Financial, Government, Politics

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