Washington (CNN) Both the Senate and the House of Representatives have passed a bill to block the program…
Washington (CNN) Both the Senate and the House of Representatives have approved a bill to block President Joe Biden’s student loan forgiveness program, which promises to cancel up to $20,000 of debt for millions of borrowers, but has been blocked by the courts.
The bill now goes to Biden’s desk for his signature, but the president has vowed to veto the legislation.
Some moderate Democrats voted in favor of the law along with Republicans. The Senate approved the law this Thursday and the House did the same last week.
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Democratic Sens. Joe Manchin of West Virginia and Jon Tester of Montana voted in favor, as did independent Sen. Kyrsten Sinema of Arizona. The resolution did not pass with a veto-proof majority.
Last week, Maine Rep. Jared Golden and Washington Rep. Marie Gluesenkamp Perez, both Democrats, also voted for the bill in the House of Representatives.
Meanwhile, borrowers are still awaiting the Supreme Court’s decision, which will determine whether the student loan forgiveness program can go into effect. The judges are expected to rule in late June or early July.
The White House has argued that the proposal to cancel some student debt will help protect borrowers from default when student loan payments resume later this year after a year-long hiatus related to the pandemic.
But Republicans argue that the student loan forgiveness program is illegal and shifts the cost of debt onto taxpayers who have decided not to go to college or who have already paid off their student loans. Blocking the program could reduce the deficit by nearly $320 billion, according to the Congressional Budget Office.
Republican lawmakers submitted their joint resolution in late March, under the Congressional Review Act, which allows Congress to repeal executive branch regulations without exceeding the 60-vote threshold in the Senate that is required for a majority of the legislation.
If the student loan forgiveness program is allowed to go ahead, individual borrowers who earned less than $125,000 in 2020 or 2021 and married couples or heads of households earning less than $250,000 a year could receive forgiveness of up to $10,000 of your federal student loan debt.
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If a qualified borrower also received a federal Pell Grant while enrolled in college, the individual is eligible for a forgiveness of up to $20,000.
Although the debt relief would help borrowers who have student loans today, the program would not change the cost of college in the future, and some critics argue that it could even lead to increased tuition.
What are the legal challenges to the debt forgiveness program?
In February, the Supreme Court admitted two appeals against Biden’s student loan forgiveness program. One was filed by six Republican-led states, and the other by two student loan borrowers who were ineligible for the full benefits of the program. The people are endorsed by the Job Creators Network Foundation, a conservative organization.
The lawsuits argue that the Biden administration is abusing its power and using the covid-19 pandemic as a pretext to fulfill the president’s election promise to cancel student debt.
The White House said it received 26 million applications before a Texas trial court blocked the program nationwide in November, and 16 million of those applications were approved for forgiveness.
So far, none of those debts have been forgiven. But if the Supreme Court allows the program to take effect, the government may rush to cancel them.
If the judges strike down Biden’s student loan forgiveness program, it’s possible the administration will make some tweaks to the policy and try again, though that process could take months.
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Other Biden Policies on Student Debt
Biden has extended the pause on federal student loan payments multiple times. Accounts have been frozen and most federal borrowers have not had to make any payments for more than three years.
But the hiatus will end at the end of this year.
The Biden administration linked the resumption date to litigation over the separate student loan forgiveness program. Payments will resume 60 days after the Supreme Court issues its ruling or 60 days after June 30, whichever comes first. A bill on the debt ceiling, currently before Congress, would also prohibit another extension.
The Biden administration has also introduced some lesser known, but potentially more lasting changes to the federal student loan system.
The new rules that will come into force in July could expand the possibilities of receiving the Loan Forgiveness program for Public Services, designed to help workers in the Administration and non-profit organizations. There is also a new proposed income-based repayment schedule that is intended to lower eligible borrowers’ monthly payments and reduce the amount they pay over time. Portions of that new repayment schedule are expected to go into effect later this year.
The Department of Education has also made it easier for borrowers who were misled by their for-profit college to apply for student loan forgiveness under a program known as borrower advocacy for repayment, as well as for those who are physically disabled. permanent.
In all, the Biden government has approved more than $66 billion in targeted aid to nearly 2.2 million borrowers.
— CNN’s Nicky Robertson contributed to this report.
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