Advocates Warn of Potential Consequences of GOP Bill to Overturn Student-Debt Relief

Some advocates are expressing concerns about the potential repercussions of a GOP bill aimed at reversing President Joe Biden’s student-debt relief initiative.

Rep. Virginia FoxxBill Clark/CQ-Roll Call, Inc (Photo: Getty Image)

GOP Bill to Overturn Student-Debt Relief

The GOP bill, initially introduced in March, is scheduled for a House vote on Wednesday.

If passed, the GOP bill would invalidate Biden’s plan to cancel up to $20,000 in student debt and terminate the recent payment pause.

The GOP bill utilizes the Congressional Review Act (CRA), a fast-track tool allowing lawmakers to overturn final rules established by government agencies.

However, critics argue that the wording of the CRA statute implies that the GOP bill could have far-reaching implications beyond blocking Biden’s broader debt relief and the student-loan payment pausesm Yahoo reported.

On Monday, the Student Borrower Protection Center and the American Federation of Teachers released a comprehensive report analyzing the potential impacts of the CRA on borrowers who have received relief through the Public Service Loan Forgiveness (PSLF) program or are presently making payments toward it.

The PSLF program forgives student debt for government and nonprofit workers after ten years of qualifying payments.

During a press call on Tuesday, Mike Pierce, the Executive Director of the SBPC, highlighted the “retroactive” nature of the CRA’s text, explaining that millions of borrowers who received debt relief through PSLF during the payment pauses could face loan reinstatement.

The specific clause in the CRA states that “a rule that does not take effect (or does not continue) may not be reissued in substantially the same form.” Pierce argues that this means “any subsequent executive action that mirrors the policy rebuked via the CRA is also invalid.”

He referred to Federal Student Aid guidelines that state paused payments count toward PSLF progress as long as borrowers meet all other requirements.

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Potential Consequences of GOP Bill

According to the SBPC and AFT’s report, approximately 268,660 borrowers in public service who received debt relief from September 2022 through March 2023 could see $19 billion in debt reinstated if the clause is enforced.

The report also estimates that at least some progress toward relief could be lost for two million public servants who are making payments under PSLF.

While Democratic lawmakers asserted during a House education committee meeting last week that payments would be reinstated under the legislation, Virginia Foxx, the committee’s chair, rejected those claims. During the markup, Foxx criticized “radical advocacy groups” for disseminating “untruthful claims” and misleading borrowers.

The GOP bill is expected to pass the House due to the Republican majority. However, it faces a more challenging path in the Democratic-controlled Senate and White House.

In a statement issued on Monday, the Office of Management and Budget declared that Biden would veto the bill if it were to reach his desk.

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