What Biden’s Latest Move Means
President Joe Biden has vetoed a bill passed by Congress that would repeal the student loan ordinance and reverse his recent student loan break extension. Borrower advocates had warned that passage of the law could have disastrous consequences.
Here’s what that means for borrowers.
Biden vetoes the bill repealing student loan waivers and suspension of student loans
Last week, Congress passed a joint resolution under the Congressional Review Act that would have halted Biden’s signed plan to forgive student loans. This plan, if enacted, would provide millions of borrowers with up to $20,000 in student loan forgiveness. The CRA’s decision would also have undone the President’s recent extension of the ongoing student loan pause, which has halted payments and frozen interest rates for most federal student loan borrowers since March 2020.
Borrower advocates had warned that passage of the Congressional Review Act bill could have disastrous consequences. Not only would this deny borrowers student loan forgiveness, but it could also result in hundreds of thousands of borrowers being reinstated on their repaid loans due to the unwinding of the PSLF, or income-conditional, payback loan they received during Biden’s recent student loan pause extension . Some proponents also suggested that borrowers would be forced to retroactively repay interest accrued during the last extension.
“Republicans in Congress led an attempt to pass a bill that blocked my administration’s plan to provide up to $20,000 in student debt relief for working and middle-class Americans. I will not refrain from helping hard-working people,” Biden said in one opinion yesterday. “That’s why I oppose this law.”
Biden’s veto means the Congressional Review Act resolution will not become law, even though it was passed by both the House and Senate. Congress could override Biden’s veto with a two-thirds majority in each chamber, but Republicans acknowledged that even with a handful of Democrats voting to scrap Biden’s debt relief plan, they would fall well short of the threshold needed to to override the veto.
Since the Congressional Review Act can only be used to repeal recently enacted regulations, this particular attempt to wreck Biden’s student debt relief plans is effectively dead.
Biden maintains student loan forgiveness but ends student loan pause in debt ceiling law
Separately, Biden signed into law a bill raising the debt ceiling last week. The bill represented a compromise between the White House and the Republican leadership in Congress. As part of the negotiated deal to raise the debt ceiling, Biden managed to keep his student loan forgiveness plan intact. However, he did agree to officially end the student loan break later that summer.
The debt ceiling bill’s ending of the student loan pause differs from the repeal effort in the Congressional Review Act. The Congressional Review Act would have nullified Biden’s recent student loan pause extension, which began after last December, potentially causing havoc for borrowers who have benefited from the extension in recent months. In contrast, the debt ceiling bill does not retroactively reverse the recent extension; It simply stipulates that the student loan break will end 60 days after June 30, a timeline that Biden administration officials had already proposed.
Still, student borrower advocates have been critical of Biden’s compromise, arguing that removing any possibility of further extending the payment pause would undermine the government’s ability to help borrowers. And a Consumer Financial Protection Bureau report released this week suggests millions of borrowers may not be prepared for an abrupt return to repayment.
The Supreme Court will soon rule on Biden’s student loan forgiveness plan
While Biden has effectively neutralized Republican efforts to overturn his plan for congressional student loan forgiveness, the initiative remains at risk. Two federal courts blocked the program last fall in response to legal challenges, and the government appealed those decisions to the Supreme Court. A final decision on Biden’s student debt relief plan is expected this month and could come as early as next week.
Advocates have urged the Biden administration to consider a fallback option for student loan forgiveness in the event of a negative Supreme Court ruling. However, officials have publicly stated that no fallback option is currently being considered.
Learn more about student loan waivers
7 new opportunities for flexibility as student loan pause ends and loan forgiveness verdict looms
If the Supreme Court rejects Biden’s student loan forgiveness plan, there are other options here
These Democrats just joined the Republicans in repealing student loan waivers
Eligibility for student loan forgiveness has been expanded in three ways as part of the new account customization policy
follow me Twitter or LinkedIn. Cash my website.