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A trio of Republican lawmakers has introduced a bill that would block President Joe Biden’s plan to forgive some college loan debt, according to a report on Friday.
Three Republican Senators, Bill Cassidy of Louisiana, John Cornyn of Texas, and Joni Ernst of Iowa, proposed a resolution under the Congressional Review Act (CRA) to reverse President Biden’s plan to forgive up to $20,000 in student loan debt for federal borrowers earning less than $125,000 annually, Business Insider reported.
The CRA is a mechanism that Congress can use to overturn final rules set by government agencies. The Senate education committee sought guidance from the Government Accountability Office (GAO) regarding whether Biden’s student debt relief plan could be subject to the CRA. The GAO responded on Friday saying the plan meets “the definition of a rule under CRA and that no exception applies. Therefore, ED’s Waivers and Modifications are subject to the requirement that they be submitted to Congress.”
“President Biden’s student loan scheme does not ‘forgive’ debt, it just transfers the burden from those who willingly took out loans to those who never went to college, or sacrificed to pay their loans off,” Cassidy said in a statement.
“Where is the relief for the man who skipped college but is paying off his work truck, or the woman who paid off her loans and is now struggling to afford her mortgage? This resolution prevents these Americans, whose debts look different from the favored group the Biden administration has selected, from picking up the bill for this irresponsible and unfair policy,” Cassidy noted further.
According to the GAO’s decision, the CRA was created in 1996 to “strengthen congressional oversight of agency rulemaking.” As the Education Department’s debt relief plan was published on the Federal Register and modifies student loan balances, it is considered a rule that implements law and policy, and is therefore subject to congressional review under the CRA, Business Insider added.
The Education Department disagreed with the GAO’s decision, stating that the debt relief plan is not subject to the CRA because it is a “one-time, fact-bound application of existing and statutorily prescribed waiver and modification authority.”
Since Biden announced his plan in August, it has faced opposition from GOP lawmakers and conservative-backed groups who filed lawsuits to block the plan. In November, two of those lawsuits successfully paused the implementation of the debt relief.
The Supreme Court heard oral arguments in the cases last month, and is expected to issue a decision on the plan’s legality by June. Until then, millions of borrowers are left uncertain about whether they will have to resume loan repayments this year without any relief, the outlet added.
It seems clear that GOP lawmakers are unwilling to wait for a Supreme Court decision. In addition to the CRA resolution on Friday, some GOP lawmakers have introduced bills aimed at blocking student debt relief and ending the student loan payment pause, which is currently scheduled to expire 60 days after June 30 or 60 days after the lawsuits are resolved, whichever comes first, Business Insider continued.
Meanwhile, the House education committee is scheduled to hold a hearing next week to review Biden’s student-loan policies. The Subcommittee on Higher Education and Workforce Development Chair Burgess Owens stated in a press release that “Biden lacks the executive authority to implement his $1 trillion executive re-write of the federal student loan program and overlooks this single basic fact: Debt cannot be canceled, only transferred from those who borrowed to those who did not.”
Meanwhile, the country’s most influential financial regulatory agency instructed student loan servicers who illegally collected money for loans that had been discharged in bankruptcy to reimburse the impacted borrowers, Yahoo Finance reported.
In addition, the agency issued a warning to all student loan servicers, cautioning them against engaging in this illegal practice and urging them to cease such efforts immediately.
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The Consumer Financial Protection Bureau (CFPB) issued a bulletin after finding that some private student loan servicers did not determine whether loans were discharged and continued to bill and collect payments, which violated the Consumer Financial Protection Act’s prohibition on “unfair, deceptive, or abusive acts or practices.”
That led to many borrowers paying thousands of dollars on loans that had already been discharged, the agency said.