Among the wave of recently passed legislation, the Senate passed legislature on Thursday to repeal President Biden's student loan forgiveness plan. This plan aimed to forgive $10,000 of federal student loan debt for each borrower. However, the Senate's decision has now blocked the plan from moving forward. The repeal has sparked controversy and debate among politicians, economists, and the general public.
The repeal of the student loan forgiveness plan has caused several issues. Borrowers who were relying on the plan to help alleviate their student loan debt are now left without relief. This could lead to financial hardship for many. Additionally, the repeal could have a negative impact on the economy. Student loan debt is a significant burden for many Americans, and forgiving some of that debt would have allowed borrowers to put more money back into the economy. The repeal may discourage future generations from pursuing higher education due to the financial burden of student loan debt.
Biden’s long-awaited student debt program was expected to cost over $400 billion and had been on hold since the 8th U.S. Circuit Court of Appeals issued a temporary block in October. Around 43 million people were eligible to participate. The Congressional Review Act was invoked by Republicans to introduce the bill that would repeal the loan forgiveness plan. The act enables Congress to reverse executive orders, and the bill requires a simple majority in both chambers to pass.
The resolution passed the House last week with a 218-203 vote and Thursday's Senate vote was 52-48 with all Republicans and one Democrat voting in favor of the repeal. Two moderate Democrats Sens. Joe Manchin of West Virginia and Jon Tester of Montana sided with the Republicans to vote in favor of the bill. Arizona Sen. Kyrsten Sinema, an independent, also voted in favor. Both Sens. Michael Bennet, D-Colo., and Mark Warner, D-Va., did not cast votes and have been vocal critics of the plan, saying it only shifted the cost burden elsewhere.
On Thursday, the Senate passed a bipartisan bill that took action on student loan debt by lifting the national debt ceiling. This new legislation establishes the date for the resumption of federal student loan repayments, which have been suspended since March 2020. All federal student loan borrowers will be required to resume making payments after August 29, and their loans will also begin accruing interest on that date.
The repayment pause for student loans has come to an end after five extensions. The debt deal prevents the education secretary from extending the pause without congressional approval. This will impact around 43 million borrowers who collectively owe over a trillion dollars in student loan debt. However, the debt deal has not significantly altered the current loan landscape. The Biden administration had already announced in November that it would end the pause in August, or at most, 60 days after the Supreme Court's decision on Biden's larger student debt relief plan.
With Biden's veto of the Senate's standalone legislation, the fate of the broader federal student loan debt relief remains in the hands of the Supreme Court.