SOFI - Senate Republicans seek to overturn Biden student loan forgiveness plan

2023-03-27 13:06:39 ET

Three Republican U.S. senators are making a bid to overturn President Joe Biden's plan to forgive up to $20K of student loan debt using a procedural tactic that would allow the chamber to pass it with a simple majority.

U.S. Senators Bill Cassidy (R-LA), John Cornyn (R-TX), and Jonie Ernst (R-IA), along with 36 other Republican colleagues, introduced a Congressional Review Act resolution. If it succeeds, the CRA would also end the pause on student loan payments that has been in place since the onset of the COVID-19 pandemic.

"The pause will have cost Americans a total of $195B by the time the most recent Biden extension is set to expire in August of 2023," the senators said in a statement.

On March 17, the Government Accountability Office decided that the student loan policy is eligible to be overturned under the CRA. The Congressional Budget Office has estimated that the Biden plan would cost more than $400B over 30 years.

"President Biden is not forgiving debt, he is shifting the burden of student loans off of the borrowers who willingly took on their debt and placing it onto those who chose to not go to college or already fulfilled their commitment to pay off their loans," Sen. Cassidy said.

At least 30 senators' signatures were needed to bring the petition to the Senate floor. With Democrats holding a slim majority (50-49) in the Senate, the petition would require some Democratic support to get the 51 votes needed to pass the CRA. Bloomberg reported that it's unclear if all Senate Republicans would vote for it.

Meanwhile, Biden's student loan forgiveness program's constitutionality is being decided by the Supreme Court. Arguments were held at the end of February and a decision is expected to be released in June.

Relevant stocks include SoFi Technologies ( NASDAQ: SOFI ), Navient ( NAVI ), Nelnet ( NNI ), and SLM Corp. ( SLM ).

More on student loan forgiveness:

• SoFi sues Biden administration seeking to end student loan payment pause
• Court temporarily blocked Biden's student loan forgiveness program in October
• SoFi: Leading in a Crisis
• Navient Corp.: Looks like a tough year ahead

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