The bill, which recently passed in the Senate with the support of Senators Kyrsten Sinema, Joe Manchin, and Jon Tester, aims to reverse Biden’s extension of the student loan payment pause, which has halted most federal student loan payments and interest until this summer.
Student debt advocacy groups are urging President Biden to veto a bill that could undo months of forbearance and potentially cancel debt forgiveness already received by some borrowers
Additionally, it would block the implementation of Biden’s plan to cancel student debt, up to $20,000 per borrower, regardless of the Supreme Court‘s upcoming ruling on the program’s legality.
Advocates fear that if the bill becomes law, approximately 40 million student loan borrowers could be required to repay the paused payments and face new interest charges, while recent debt cancellations may be reversed. They argue that this would harm essential workers such as veterans and nurses, who are still recovering from the economic impact of the pandemic. Advocacy organizations, including the Student Debt Crisis Center and the Student Borrowers Protection Center, emphasize the importance of fulfilling Biden’s promise to veto the bill and protecting hardworking families burdened by debt.
Under the program, each month of paused payments during forbearance counted toward debt forgiveness
The bill’s passage surprised and disappointed borrower advocates, as it followed an agreement between the White House and House Speaker Kevin McCarthy not to extend the forbearance, meaning student loan payments would resume in September, irrespective of the Supreme Court’s decision. While some Republicans who supported the bill claim it does not mandate back payments, borrower advocates worry that it would reinstate debt for borrowers who received debt cancellation under the Public Service Loan Forgiveness (PSLF) program.
According to a report from the American Federation of Teachers (AFT) and the Student Borrowers Protection Center (SBPC), around 268,660 public service workers who had their debt canceled through the PSLF program from September 2022 to March 2023 could see $19.5 billion in debt reinstated if the bill becomes law. Advocates argue that this bill would severely damage an already flawed student loan system and undermine the public’s trust in the government
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