Democrats reintroduce bill to keep spotlight on Biden's student loan forgiveness plan
While President Joe Biden's far-reaching plan to forgive student debt remains in doubt, Democrats for the second time this week are making a case for Congress’s role in addressing the debt crisis.
On Tuesday, a cadre of roughly 125 progressives in the Senate and House issued a letter reiterating their support for Biden’s beleaguered plan and hinting at upcoming legislation to support loan relief. Then on Thursday, a pair of Democratic leaders in the House announced the reintroduction of a bill that would lower college costs and make it easier for current and future borrowers to pay off their debt.
The news Thursday coincided with Biden’s spending proposal for the 2024 fiscal year, which includes similar proposals to those detailed in the House bill as well as money to help borrowers ease back into loan payments once the pandemic-era moratorium ends.
“While the president's plan is held up to the Supreme Court, Congress must address the root causes of the debt crisis, including the declining value of the Pell Grant and our flawed student loan system,” said Rep. Bobby Scott, ranking member on the House Committee on Education and the Workforce and the bill's co-author, during a press conference Thursday.
But the prospects of these efforts are dim, especially in a Republican-controlled House. Republicans, who did away with Biden’s student debt cancelation in their own pitch for 2024 spending, have made it clear they’re poised to reject any semblance of widespread relief. Just last month, a group of Republican senators filed a bill seeking to end the payment pause, and last week a private loan refinancing company filed suit with the same objective.
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House Democrats reintroduce bill to ease the cost of college
The LOAN (Lowering Obstacles to Achievement Now) Act, which notably hasn't secured any Republican cosponsors, aims to lower the cost of college and burdens of debt for current and future students. Specifically, it would:
Double Pell Grants, federal financial aid reserved for low-income Americans to a maximum award of $14,000 annually;
Improve the Public Service Loan Forgiveness program by shortening the timeframe to receive relief and making permanent a waiver that allows participants’ past payments to count;
Eliminate interest capitalization on student loans when borrowers are in deferment or forbearance and strengthen supports for “vulnerable” borrowers; and
Lower and cap interest rates for new borrowers, including those of private loans.
This legislation “is something that will impact so many people,” said Rep. Frederica Wilson, who sponsored the bill alongside Scott, during the Thursday press conference, pointing to the intergenerational buildup of debt and the persistence of interest that prevents borrowers from being able to pay off their principal. “They have no equity in anything.”
It's also a symbolic gesture: “We’re just trying to amplify this message and hoping that the Supreme Court will hear us," Wilson continued, "that they will take into account what we’re saying when they make this decision regarding President Biden’s plan.”
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Biden’s budget: Preparing for the end to student loan payment pause
That plan, to relieve up to $20,000 in student loan debt each for tens of millions of Americans, is on shaky ground as it undergoes deliberations by the Supreme Court.
Even with that relief, borrowers will likely have to resume paying off their loans. And Biden's 2024 spending proposal sets aside money to support that shift, with a suggested $620 million in added funding for the Federal Student Aid office.
"This additional funding is needed to provide better support to student loan borrowers, especially as they return to repayment," the budget reads. "This increase would allow FSA to implement critical improvements to student loan servicing, continue to modernize its digital infrastructure, and ensure the successful administration of its financial aid programs through a simplified and streamlined process for students and borrowers."
The pandemic-era moratorium on repayments was enacted and then extended by President Donald Trump. It was extended again repeatedly under Biden.
Biden’s 2024 budget would also:
Increase the maximum Pell Grant award
Provide grants to fund expansion of free community college
Reinstate the expanded Child Tax Credit, which during the pandemic helped significantly reduce child hunger and poverty rates
"I can't emphasize enough how critical this funding is to continue to meet the needs of students and borrowers," said James Kvaal, Education Department undersecretary, in a news conference about the budget. "If enacted, these investments will help us work with college leaders, faculty and students to build a higher education system that delivers on the promise of upward mobility, equity and economic growth."
Contact Alia Wong at (202) 507-2256 or awong@usatoday.com. Follow her on Twitter at @aliaemily.
This article originally appeared on USA TODAY: How Democrats are keeping eyes on Biden student loan plan, debt crisis
