Republican debt-ceiling solutions include eliminating federal programs like the Biden administration’s Student Loan Forgiveness program.
Wednesday, Republican House Speaker Kevin McCarthy (California) unveiled the Republican plan. One of its primary functions is to thwart the controversial plan to forgive up to $20,000 per borrower’s student loans.
GOP Demand to End Student Loan Payment Suspension
Since President Joe Biden announced the plan last summer, it has faced a number of legal and political challenges. It is currently under review by the Supreme Court of the United States.
This is one of the ways in which the Republican proposal to increase the debt ceiling targets student loan forgiveness. Moreover, Republicans demand an immediate end to the payment suspension imposed in the early days of the COVID-19 pandemic.
In addition, the Republican plan would obstruct a revised income-driven repayment plan that could result in substantial loan payment reductions, with some borrowers receiving $0 monthly payments.
Read more: What’s Next For Student Loan Forgiveness After Supreme Court Ruling?
White House Opposition to McCarthy’s Bill
Lastly, the McCarthy bill would prohibit future student debt relief programs from being
implemented without congressional approval.
It is not surprising that Republicans want to eliminate the student debt relief programs of the Biden administration. A number of Republican leaders have already signaled their intention to repeal expansive loan forgiveness.
This does not guarantee their success, however. McCarthy’s bill has virtually no chance of becoming law because Senate Democrats and the White House are likely to oppose it vigorously. McCarthy is adamant that the House pass it by the end of the week.
The 45 Million executive directors Melissa Byrne accused McCarthy of attempting to “hold the debt ceiling hostage and risk crashing the global economy in order to harm 40 million student loan borrowers and our family. American citizens deserve better.
Even if McCarthy’s proposal fails, millions of federal student loan borrowers will soon be required to begin paying back their debt.
The eighth extension of the payment pause is set to expire 60 days after June 30, 2023 or whenever the Supreme Court rules on the plan. In either case, it is likely that payments will resume later this summer.
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