Attempt to kill Biden student debt relief plan tied to income fails in U.S. Senate
‘Socialist fever dream,’ says McConnell. ‘Give me a break,’ says Schumer.
Student debt relief activist rally in front of the U.S. Supreme Court on June 30, 2023 in Washington, D.C. The Supreme Court stuck down the Biden administration’s student debt forgiveness program in Biden v. Nebraska. (Kevin Dietsch/Getty Images)
WASHINGTON — U.S. Senate Republicans on Wednesday night failed to garner enough votes to block a new Biden administration rule on an income-driven repayment plan for federal student loans.
The resolution did not pass, 49-50. Sen. Joe Manchin III of West Virginia was the sole Democrat who joined Republicans in backing the resolution. Sen. Tim Scott of South Carolina did not vote.
Following the vote, Senate Majority Leader Chuck Schumer said he was glad the resolution failed.
“There are millions of students, poor, working class … who would have benefit from what the president has done,” Schumer said.
The Congressional Review Act resolution was introduced by the top Republican on the U.S. Senate Health, Education, Labor and Pensions committee, Sen. Bill Cassidy of Louisiana.
There is no companion resolution in the House, where Republicans have a slim majority. The White House has already vowed to veto the measure should it make its way to the president’s desk.
“This legislation would mean higher payments for student loan borrowers and would dramatically raise costs for graduates,” the White House said in a statement. “It is exactly the wrong direction.”
A Congressional Review Act, or CRA, allows Congress to overturn any regulatory rules made by the White House. A CRA needs just 51 votes to pass, unlike the usual 60 votes required to defeat a filibuster.
On the Senate floor Wednesday, Cassidy argued that the new income-driven repayment plan does not “forgive debt.”
“It transfers the burden of $559 billion in federal student loans to the 87% of Americans who don’t have student loans, who chose not to go to college, or already responsibly paid off their debts,” he said.
This is not the first time congressional Republicans have moved to block the Biden administration’s student debt relief policy.
In May, Republicans introduced and sent a CRA to the White House that would prevent a one-time cancellation of up to $20,000 in federal student loan debt for some borrowers who qualify. The White House vetoed that, and a month later the Supreme Court struck down the policy.
On the Senate floor Wednesday before the vote, Schumer said the current CRA is a “punch to the gut for millions and millions of borrowers, the overwhelming majority of whom are working class, poor, or middle class.”
“Republicans don’t think twice about giving huge tax breaks to ultra-wealthy billionaires and large corporations, but when it comes to helping out working families with student debt relief, suddenly it’s too much money, it will raise the deficit, we can’t afford it,” Schumer said. “Give me a break.”
The Department of Education unveiled the Saving on a Valuable Education, or SAVE, plan hours after the Supreme Court in June struck down the Biden administration’s one-time student debt cancellation that would have forgiven up to $10,000 in federal student loan debt for single adults making under $125,000 a year, or under $250,000 for married couples.
Borrowers who received Pell Grants would have been eligible for an additional $10,000 in forgiveness of federal student loans.
The new income-driven repayment plan calculates payments based on a borrower’s income and family size and forgives balances after a set number of years. More than 5.5 million student loan borrowers have already enrolled in the SAVE plan, according to data released by the Department of Education.
Senate Minority Leader Mitch McConnell of Kentucky called the new IDR rule a “socialist fever dream” on the Senate floor Wednesday.
“Whichever way you slice it, the President’s policy is a raw deal for working Americans who have made the sacrifices to pay off their student loans, or avoided debt altogether,” he said. “But with taxpayers footing the bill, it’s also a powerful incentive for schools to raise the cost of college even higher.”
Repayments on federal student loans restarted last month after a nearly three-year pause due to the coronavirus pandemic.
With the SAVE plan, borrowers with undergraduate loans will pay 5% of their discretionary income, rather than the 10% required under previous income repayment plans. And borrowers with undergraduate and graduate loans will pay a weighted average between 5% and 10% of their incomes.
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