The House of Representatives failed to override President Donald Trump’s veto of a major student loan forgiveness bill.
Here’s what you need to know.
Student Loan Forgiveness
In a big win for Education Secretary Betsy DeVos, House Democrats failed to override Trump’s veto of a major student loan forgiveness bill by a vote of 238-173. A two-thirds majority is required to override a presidential veto. Last month, Trump vetoed congressional legislation that would have overturned a key student loan forgiveness rule drafted by DeVos and the U.S. Education Department. In March, the U.S. Senate voted 53-42 to overturn a new student loan forgiveness rule that critics say would limit student loan forgiveness for students when a college closes due to fraud. All Senate Democrats and 10 Republicans voted on a bipartisan basis. The House of Representatives overturned the rule in January by a vote of 231-180.
Student loan forgiveness: what’s at stake
So, what does this failure to override a presidential veto mean? Effective July 1, 2020, new student loan forgiveness rules will be instituted. The student loan forgiveness rules are known as borrower defense to repayment, which allow students to have their federal student loans forgiven if a school employed illegal or deceptive practices to encourage the students to borrow debt to attend the school. However, without these rules, students could have to repay federal student loans even if they didn’t find gainful employment or finish their degree before their school closed. Trump’s veto doesn’t impact public service loan forgiveness or student loan forgiveness through income-driven repayment.
DeVos: balance the needs of students and taxpayers
DeVos rewrote the rules —which were drafted during the Obama administration — to narrow the requirements to receive student loan forgiveness. Why? DeVos has sought to strike a balance between the needs of students and taxpayers. DeVos believes that too many borrowers could qualify for student loan forgiveness under the Obama-era rules, which potentially could cost taxpayers billions of dollars in unnecessary student loan forgiveness. DeVos believes that her student loan forgiveness rules would save taxpayers $11 billion over 10 years. That said, DeVos doesn’t want to stop student loan forgiveness through borrower defense to repayment. Rather, DeVos believes that student loan forgiveness should not be automatic. DeVos said borrowers impacted by school closure would need to apply for student loan forgiveness and prove financial harm. Borrowers also would have three years to prove their claim for student loan forgiveness. Opponents, including several veterans groups, oppose the new rules, which they say unfairly hurts veterans who have been defrauded by for-profit colleges and who should receive student loan forgiveness. Opponents also argue that the new rules will limit the amount of student loan forgiveness that borrowers will receive, even if they are victims of fraud.
How to pay off student loans faster
If you have student loans, make sure to have a game plan. What’s the best way to pay off student loans faster? Start with these four options, all of which have no fees: