In a move of profound significance, the United States Congress (which currently holds a Republican majority) voted to dismantle President Biden’s student loan relief program on June 1 — setting the stage for a potential clash with the executive branch.
As a cornerstone of Biden’s campaign and early presidency, the student debt cancellation plan was hailed by many as an ambitious effort to alleviate the financial burdens on millions of Americans. However, a resounding congressional decision has recently undermined this initiative, highlighting the contentious and complex debate surrounding student loan debt in the U.S.
The proposal, which outlined a strategy to eradicate $10,000 of student loan debt for individuals earning a maximum of $125,000 annually ($250,000 for married couples) was hit with resistance from the get-go. In addition, individuals who have been beneficiaries of federal Pell Grants would see an increased relief of $20,000, the proposal said. Analysts projected the implementation of this proposal could lead to expenditures reaching as high as $400 billion.
MORE ON THE US ECONOMY:
- Investor Purchases of US Homes Declines From Pandemic High
- Target CEO Warns Organized Retail Theft Will Cost Shareholders $1.3 Billion This Year
- New Jersey Strives to Prevent New York’s Congestion Pricing
- Florida Orange Industry Set for Worst Production Since 1930s
- Small Businesses Going Bankrupt 73% Faster Than Beginning of COVID Crisis
Polarizing views
As both sides of the aisle grappled with the magnitude of the nation’s student debt crisis, many had hoped that Biden’s debt cancellation plan would serve as a much-needed solution for millions of Americans burdened with student debt. Yet, the plan was met with significant opposition. Critics argued that the debt cancellation would unfairly benefit the affluent who held large sums of student debt, while doing little to address the root causes of soaring higher-education costs.
“Unfortunately, the president is guaranteed to veto the measure, and there are not enough Democrats in the House and Senate to be willing to override his veto,” said Senate Minority Whip John Thune (R-SD).
Success
You are now signed up for our newsletter
Success
Check your email to complete sign up
Despite Thune’s expectations, Congress’s repeal of the initiative was not wholly unexpected. The move showcases the depth of discord within the halls of Capitol Hill over how best to address the ongoing student loan crisis. It also tees up a scenario in which the executive branch could flex its muscle and potentially lead to a presidential veto, experts say.
“There are already more than 50 existing student loan repayment and forgiveness programs aimed at attracting individuals to vital service jobs, such as teachers, health care workers and public servants,” said Senator Joe Manchin (D-VA), who voted to repeal the bill.
“This Biden proposal undermines these programs and forces hard-working taxpayers who already paid off their loans or did not go to college to shoulder the cost,” said Manchin, adding, “I voted to repeal the Biden Administration’s student loan cancellation proposal because we simply cannot afford to add another $400 billion to the national debt.”
This recent congressional decision has undoubtedly amplified the national conversation about student debt. Lawmakers, policy experts, and the public are all eager to grapple with the question of how best to address this growing crisis and debt ceiling.
Stirring the waters
Despite the repeal, supporters of Biden’s student loan forgiveness plan are not backing down. They maintain that the cancellation of student debt would provide an immediate and substantial relief for millions of Americans — and could even act as a catalyst for broader economic growth.
More than 41 million Americans are currently saddled with the burden of student loans, owing a collective amount of over $1.7 trillion, according to data from the Federal Reserve.
According to findings from the “Invest in You Student Loan Survey” conducted by research firm Momentive, a staggering 81 percent of people who struggle with student loan payments say they’ve had to “delay one or more key life milestones” because of their debt. Conducted online from Jan. 10 to Jan. 13, Momentive surveyed a sample of 5,162 American adults to gain a deeper insight into the effects of student debt.
Now, the spotlight shifts back to Biden as experts predict whether the president will use his executive power to veto the repeal, and force the relief program forward.
