By Hugh T. Ferguson, NASFAA Senior Staff Reporter
House Speaker Kevin McCarthy (R-Calif.) on Wednesday formally unveiled the GOP’s highly anticipated proposal to address the debt limit, seeking to push President Joe Biden and congressional Democrats into negotiations over future spending levels.
While the bill touches on the entirety of the federal budget and includes a provision to raise the debt ceiling by roughly one year, it also covers a number of higher education-related provisions, particularly those concerning the student loan portfolio.
Specifically, the bill would end the ongoing pause on student loan repayments and interest accrual by unraveling the executive orders that extended the payment pause following the enactment of the Coronavirus Aid, Relief, and Economic Security (CARES) Act, prohibit the administration from carrying out its debt cancellation program currently being considered by the United States Supreme Court, block the administration's proposed income-driven repayment plan, and permanently prevent the Department of Education from issuing regulations that would increase costs associated with the student loan program.
Notably, the legislation uses language — “such a rule shall have no force or effect” — that would retroactively restore interest accrual that was halted during the pause. The same language was used in Republicans’ recently introduced Congressional Review Act, which would overturn Biden’s student debt cancellation plan and end the pause on federal student loan payments.
The legislation has garnered support from House GOP leadership.
Rep. Virginia Foxx (R-N.C.), chairwoman of the House Committee on Education and the Workforce, praised the measure and criticized the administration’s handling of the student loan portfolio.
“America is $31 trillion in debt. What has President Biden done to defuse this ticking time bomb? Absolutely nothing,” Foxx said. “Instead, the President continues to double down on reckless policies, including blanket student loan bailouts, that are hurting America’s families, workers, and students.”
Democrats largely lambasted the proposal.
Rep. Rosa DeLauro (D-Conn.), ranking member of the full Appropriations Committee, said the proposal would threaten economic security and argued that spending caps could result in departments experiencing more than 22% cuts to funding, an issue that was discussed at length during a House Appropriations subcommittee hearing that dug into the potential impact on ED.
“This bill’s Budget Control Act framework recreates the looming cloud of sequestration both Democrats and Republicans fought to erase,” DeLauro said. “It all but guarantees more chaos and increases the likelihood of going from one debt limit and government shutdown fight to the next.”
Education Secretary Miguel Cardona denounced the proposal and took issue with GOP efforts to cancel the administration’s debt cancellation program.
“While President Biden, Vice President Harris, and I continue working to deliver much-needed relief to borrowers working to get back on their feet after the pandemic, Speaker McCarthy’s proposal tells us everything we need to know about what he and his allies value — tax cuts for the super rich, special interests, and big corporations over support for hardworking Americans,” Cardona said.
Cardona went on to argue that many Republican lawmakers personally benefited from Paycheck Protection Program (PPP) loans being canceled, and called GOP critiques of student loan debt cancellation hypocritical.
The House is expected to consider the legislation as soon as next week.
Publication Date: 4/20/2023
James C | 4/24/2023 8:25:52 AM
I agree they can't continue to justify the pause in student loan repayments, but to retroactively restore interest accrual seems unusually harsh and aimed at a constituency that tends to vote Dem.
David S | 4/20/2023 12:49:14 PM
"Cardona went on to argue that many Republican lawmakers personally benefited from Paycheck Protection Program (PPP) loans being canceled..."
At my place of employment, as a financial aid professional, I am literally forbidden from letting a vendor buy me a beer, because that would be a conflict of interest. But members of Congress can create a loan program with built-in forgiveness provisions, receive millions of dollars themselves from the program they created, then have every dollar forgiven. Imagine if they were held to the same conflict of interest standards that I am.
And that they then oppose a student loan borrower getting a $10K break and pretending that an IDR plan is going to tank the economy...it's obvious that they want fewer Americans attending college. They all went to college, and so do their kids, but they want those who need financial help for college to go work at Walmart instead. While opposing raising the minimum wage.
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