In Wisconsin, more than 4,800 public service workers who had their student loan debt canceled could see their loans reinstated, and more than 36,000 could lose credit towards debt relief.
A Republican effort to reverse President Joe Biden’s student loan debt relief plan could cause more than a quarter-million public service workers to lose out on already-canceled loans and push more than 2 million more into greater debt, according to a new report from the American Federation of Teachers (AFT) and the Student Borrower Protection Center (SBPC).
The report, released Tuesday, comes as the Republican-controlled US House of Representatives prepares to vote on a resolution Wednesday that would block Biden’s student loan debt cancellation plan, which seeks to cancel up to $20,000 for borrowers who earned less than $125,000 (or $250,000 for a married couple) in 2020 or 2021.
The GOP’s resolution would nullify that effort. It would also end the current pause on federal student loan payments and interest and potentially even reverse already-canceled student loan debt for teachers, nurses, firefighters, paramedics, and other public service workers who got relief through the Public Service Loan Forgiveness Program (PSLF).
Under the PSLF, eligible public service workers who make federal student loan payments for 120 months—10 years—then become eligible to have their remaining balance forgiven.
The current pause on student loan payments has counted towards the necessary payments under the program, meaning borrowers have received credit as if they were making monthly payments, and in many cases, have hit the 10-year mark and had the remainder of their debt canceled. But if Republicans are successful in passing their resolution into law, that pause would be struck down, meaning these borrowers could see that debt cancellation reversed and their loan balances reinstated.
Biden has pledged to veto the legislation, which AFT president Randi Weingarten referred to as “a six-alarm fire.”
The AFT’s report found that the GOP’s resolution could:
- Restore the student loan debt of more than 268,000 US public service workers (including who had loan balances canceled under the PSLF, increasing their debt burden by nearly $20 billion—or more than $72,000 per person.
- Cause more than 2 million low-income borrowers and public service workers to lose out on progress towards having their debt canceled via Income-Driven Repayment or the PSLF program.
- Reverse months of paused payments and waived interest fees, leaving 40 million borrowers past-due and adding tens of billions of dollars in new interest to their debt.
In Wisconsin, up to 4,850 public service workers who owed $297 million but had their debt canceled could see their loans reinstated, and as many as 36,433 borrowers who owe $2.7 billion in debt could lose credit towards PSLF.
The resolution is opposed by a coalition of more than 260 groups representing labor unions, students, borrowers, workers, consumers, veterans, people of color, people with disabilities, and people of faith. The coalition has warned of the chaos the GOP’s legislation would unleash and the negative impact it would have on public sector workers and their families.
“This week’s vote is a test of American values—do we stand on the side of teachers, nurses, first responders, and service members who fought to keep our kids safe and our communities healthy throughout the pandemic, or do we betray their service in pursuit of Republicans’ never-ending culture war,” said Mike Pierce, executive director of SBPC. “Taking back student debt relief already delivered to public service workers is reckless, cruel, unjust, and un-American.”
The report cites previous research showing how the exorbitant debt burdens of many teachers cause them significant stress professionally and personally, lead to suicidal ideation, and in some cases, even push them out of the profession.
“Public service workers have dedicated their lives to making a difference in the lives of others. They care deeply about what kids and communities need. We have a duty to honor and respect them,” Weingarten said in a statement.
It’s not just public sector workers who would be affected by the Republican resolution. An estimated 40 million borrowers—an estimated 87% of whom earn less than $75,000 per year—are eligible for some level of debt cancellation under Biden’s plan, including 16 million people who’ve already been approved for relief.
The GOP plan would nix that, depriving tens of millions of middle- and working-class Americans of debt relief.
The president’s plan came after years of activism from borrowers, lawmakers, and advocates who pointed out how the growing cost of college—which has roughly tripled since 1980, even after accounting for inflation—and stagnant levels of federal aid have forced students to take on burdensome loans.
As a result, the total national student debt has nearly tripled over the past 15 years and the average undergraduate student now graduates with roughly $25,000 in student loan debt, according to the US Department of Education (DOE).
Biden’s plan has been well-received by voters, with polls finding that a majority consistently support his proposal.
Republicans, however, have spent months attacking the president over the issue. They already voted last month to block Biden’s plan as part of a larger House bill, but this time around, they are using a tool called the Congressional Review Act, which allows Congress to block recent presidential policies.
If the House passes the resolution, it will force a vote in the Democratic-controlled Senate, where the odds of the resolution passing are slimmer, but not impossible.
Still, the effort is almost certain to ultimately fail, due to Biden’s veto pledge.
“This resolution is an unprecedented attempt to undercut our historic economic recovery and would deprive more than 40 million hard-working Americans of much-needed student debt relief,” the Biden administration said in a statement on Monday.
The Supreme Court is also expected to make a decision in two legal challenges to Biden’s plan brought by GOP attorneys general and a conservative group. The justices are expected to issue rulings in the cases next month.
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