Student Loan Forgiveness in Jeopardy: GOP Debt Ceiling Plan Would Void Supreme Court Ruling
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David Nadelle
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In an effort to avoid a default on the U.S. national debt as early as June, the U.S. House of Representatives narrowly passed a Republican-backed bill Wednesday calling to raise the debt ceiling through 2024 and cut government spending.
Should the bill somehow pass through Congress and into law, President Joe Biden’s sweeping student loan forgiveness program, which is currently sitting in limbo as the Supreme Court deliberates its legitimacy, will effectively be quashed, even if the court greenlights the plan.
The debt ceiling plan includes $4.5 trillion in government spending cuts, including a 22% reduction in funding for the Education Department (DE), according to an ed.gov fact sheet. This is something the Democrat-led federal government and student debt forgiveness supporters will vehemently fight.
“Speaker McCarthy declared that he will force a catastrophic default and plunge America into recession unless he can claw back school relief dollars and prevent millions of hard-working Americans from getting the student debt relief they need coming out of the pandemic,” said Secretary of Education Miguel Cardona.
According to the DE’s statement, the 22% funding cut will seriously jeopardize many federal-funded programs affecting financial help for low-income students, support for students with disabilities and mental health issues and “would likely eliminate Pell Grants altogether for 80,000 students while reducing the maximum award by nearly $1,000 for the remaining 6.6 million recipients.”
“It is outrageous and unacceptable that lawmakers would prioritize political maneuvering over the financial well-being and future of millions of struggling student loan borrowers,” stated Natalia Abrams, president of the Student Debt Crisis Center (SDCC). “We call on Congress to put the needs of the people first and reject any legislation that seeks to undermine efforts to provide relief and support to those burdened by student debt.”
Through voting 217-215 in favor to pass the Limit, Save, Grow Act, the House is putting pressure on Biden to take action before the government defaults on its borrowing and spending obligations and sends the economy into further trouble and a possible recession.
The president has already flat-out refused to consider a Republican proposal that will significantly hinder his short-term domestic growth agenda. For Biden, lifting the debt ceiling is “non-negotiable,” per CNN. Talking to Axios, Rep. Susan Wild (D-Penn.) admitted “My understanding, from people I’ve spoken with (in the Senate), is that it’s not even going to get a vote. I think that’s just fine.”
The future of Biden’s plan to relieve up to $20,000 in student loan debt for tens of millions of Americans remains uncertain, as the Supreme Court continues to deliberate on the lawsuits filed by GOP-endorsed groups in October 2022. The White House has extended the federal student loan payment moratorium until June 30, 2023, or earlier if appeal litigation is resolved by the Supreme Court.
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