Republican Bill Would End Student Loan Payment Pause
The bill introduced Wednesday would also prohibit the president from canceling outstanding student debt due to a national emergency.
- Borrowers have not had to make student loan payments for over two years.
- Republicans opposed to the payment pause say it disproportionately benefits high-earning individuals.
- The bill, however, has very little chance of passing.
Congressional Republicans are targeting President Joe Biden's authority over federal student loan debt.
Just a day after reports surfaced that Biden is considering canceling some federal student debt, Senate Republicans introduced the Stop Reckless Student Loan Actions Act, which, if enacted, would immediately end the two-year student loan payment pause.
Federal student loan borrowers have not needed to make payments on their loans since March 2020 when Congress passed the CARES Act in response to the economic turmoil caused by the COVID-19 pandemic. Since then, both Presidents Donald Trump and Biden tacked on extensions; Biden most recently extended the pause through the end of August. It was previously set to expire at the start of May.
The bill introduced Wednesday would limit the president's authority to suspend repayments going forward. It would also prohibit the president from canceling outstanding federal student loan obligations due to a national emergency, according to a joint statement by its five Republican sponsors:
- Sen. Bill Cassidy of Louisiana
- Sen. John Thune of South Dakota
- Sen. Richard Burr of North Carolina
- Sen. Mike Braun of Indiana
- Sen. Roger Marshall of Kansas
The goal of the bill is to end the president's "untargeted, budget-busting suspension of repayments," the senators said in their statement.
The bill, however, does not prevent similar suspensions of payments due to future national emergencies. It would also still allow the president to offer short-term suspensions for low- and middle-income borrowers.
The chances of it passing are slim, as Democrats currently control the House of Representatives, Senate, and White House. Progressives generally have supported the payment pause and it has been a popular initiative among both Democrat and Independent voters.
The U.S. currently holds over $1.6 trillion in federal student loan debt spread across 43.4 million borrowers, according to the U.S. Department of Education (ED).
Republicans opposed to the payment pause have said it disproportionately benefits high-earning individuals. ED previously stated that the pause saves borrowers approximately $5 billion per month. Conservatives argue that those savings harm taxpayers, as that revenue is being withheld from the federal government and might have impacts elsewhere.
"As Americans continue to return to the workforce more than two years since the pandemic began, it is time for borrowers to resume repayment of student debt obligations," Sen. Thune said in the joint statement. "Taxpayers and working families should not be responsible for continuing to bear the costs associated with this suspension of repayment."
Proponents of the pause say it has helped borrowers pay off other debt and relieved financial pressures from job changes or decreased earnings. A report from the Federal Reserve Bank of New York found that the average credit score of all student loan borrowers increased almost ten points thanks to the pause.