The Biden administration's one-time student loan forgiveness program is facing a fresh threat from House Republicans while it awaits a ruling from the Supreme Court about whether the proposal can take effect.
Lawmakers are expected to vote Wednesday on a resolution seeking to block the forgiveness program as well as end the pandemic-related pause on federal student loan payments.
The proposed forgiveness program, which promises up to $20,000 in federal student debt relief to millions of low- and middle-income borrowers, was halted by lower courts late last year before any student debt was canceled. The pause on payments, which has been in place since March 2020, is set to end later this year.
President Joe Biden has pledged to veto the Republican-led resolution if it passes in both the House and Senate. The administration said that the resolution would "weaken America's middle class."
But Republicans argue that the student loan forgiveness program is unlawful and shifts the cost of the debt to taxpayers who chose not to go to college or already paid off their student loans. Blocking the program could reduce the deficit by nearly $320 billion, according to the Congressional Budget Office.
"President Biden's so-called student loan forgiveness programs do not make the debt go away, but merely transfer the costs from student loan borrowers onto taxpayers to the tune of hundreds of billions of dollars," said Rep. Bob Good, a Republican from Virginia, in a statement released when he introduced the resolution in March.
Even though Biden has pledged to veto the bill, votes in the House and Senate could force more moderate members of the Democratic Party to take a public stance regarding the student loan forgiveness program. Some lawmakers have been critical of the proposal in the past.
The Senate has yet to schedule a vote on the resolution, but nearly all of the 49 Republican senators have signed on as sponsors.
Republican lawmakers introduced their joint resolution in late March, using the Congressional Review Act, which allows Congress to roll back regulations from the executive branch without needing to clear the 60-vote threshold in the Senate that is necessary for most legislation.
If the student loan forgiveness program is allowed to move forward, individual borrowers who made less than $125,000 in either 2020 or 2021 and married couples or heads of households who made less than $250,000 a year could see up to $10,000 of their federal student loan debt forgiven.
If a qualifying borrower also received a federal Pell grant while enrolled in college, the individual is eligible for up to $20,000 of debt forgiveness.
While the debt relief would help borrowers with student loans now, the program wouldn't change the cost of college in the future -- and some critics argue that it could even lead to an increase in tuition.
Where do legal challenges to the debt relief program stand?
In February, the Supreme Court heard two legal challenges to Biden's student loan forgiveness program. One was filed by six Republican-led states, and the other was brought by two student loan borrowers who did not qualify for the full benefits of the program. The individuals are backed by the Job Creators Network Foundation, a conservative organization.
The lawsuits argue that the Biden administration is abusing its power and using the Covid-19 pandemic as a pretext for fulfilling the president's campaign pledge to cancel student debt.
The White House has said that it received 26 million applications before a lower court in Texas put a nationwide block on the program in November, and that 16 million of those applications have been approved for relief.
No debt has been canceled yet. But if the Supreme Court allows the program to take effect, it's possible the government moves quickly to forgive those debts.
If the justices strike down Biden's student loan forgiveness program, it could be possible for the administration to make some modifications to the policy and try again -- though that process could take months.
The Supreme Court is expected to issue its ruling in late June or early July.
Biden's other student debt policies
Biden has extended the pause on federal student loan payments several times. Accounts have been frozen and most federal borrowers have not been required to make a payment for more than three years.
But the pause is set to end later this year. The Biden administration has tied the restart date to the litigation over the separate student loan forgiveness program. Payments are set to resume 60 days after the Supreme Court issues its ruling or 60 days after June 30, whichever comes first.
But the Biden administration has also made some lesser-known but potentially longer-lasting changes to the federal student loan system.
New rules set to take effect in July could broaden eligibility for the Public Service Loan Forgiveness program, which is aimed at helping government and nonprofit workers. And a new income-driven repayment plan proposal is meant to lower eligible borrowers' monthly payments and reduce the amount they pay back over time. Parts of that new repayment plan are expected to go into effect later this year.
The Department of Education has also made it easier for borrowers who were misled by their for-profit college to apply for student loan forgiveness under a program known as borrower defense to repayment, as well as for those who are permanently disabled.
Altogether, the Biden administration has approved more than $66 billion in targeted loan relief to nearly 2.2 million borrowers.