Biden threatens to veto GOP bid to repeal income-driven repayment regulation

President Joe Biden issued a veto threat Monday against a Republican-led effort in Congress to overturn his administration’s income-driven student loan repayment regulation.

House Joint Resolution 88 would invoke the Congressional Review Act to repeal the administration’s so-called SAVE plan, which modifies the rules around the income-driven repayment program, which allows student loan borrowers to make smaller payments on their loans if their annual earnings fall below a certain threshold.

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The bill could receive a vote in the Republican-controlled House of Representatives as soon as Tuesday, but a companion bill in the Senate failed last month, meaning the bill is unlikely to reach the president’s desk.

The regulation, which allows borrowers to pay to make payments totaling commensurate with 5% of their discretionary income above the poverty line, was a change from the previous policy, which required payments equaling 10% of a borrower’s income. The regulation also allows for the possibility that the loan can be forgiven after 10 years of payments, a change from the previous threshold of 20 years.

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“This resolution would put our record economic recovery at risk by reducing the consumer spending of millions of borrowers returning to repayment after a more than a three-year pause, and it would be particularly harmful for low- and middle-income borrowers, community college students, and borrowers who work in public service,” the White House said in a statement.

The Biden administration has taken numerous steps to try to cancel student loans. To date, the administration has discharged more than $120 billion in student loans through existing programs such as the income-driven repayment program. A bid to cancel up to $20,000 in loans for all borrowers making less than $125,000 was blocked by the Supreme Court, which said the president lacked the authority to enact a widespread loan forgiveness.