What This Bill Does
This bill requires Congress to specifically approve and fund any broad student loan forgiveness program before the Department of Education can cancel student loan debts for groups of borrowers. The bill aims to prevent the executive branch from forgiving large amounts of federal student loans without Congress explicitly appropriating money for that purpose.
Who It Affects
The Department of Education and its Secretary. Federal student loan borrowers who might receive broad-based loan forgiveness. Congress, specifically the authorizing committees and the Appropriations committees of both the Senate and House.
Key Provisions
* The Secretary of Education cannot provide class-based loan forgiveness (cancellation, waiver, or reduction of student loan obligations affecting two or more borrowers totaling more than $1,000,000) unless Congress has specifically approved and funded it through an appropriations law (Sec. 2(b)).
* Before providing class-based loan forgiveness, the Secretary must submit a detailed written request to Congress describing the number of borrowers affected, the total amount of loans to be forgiven, the reason for the forgiveness, the legal authority being used, and why the forgiveness should apply to groups rather than individual cases (Sec. 2(c)(2)).
* Existing targeted loan forgiveness programs that were in effect before January 1, 2022 are exempt from this requirement if they handle cases one borrower at a time based on individualized eligibility determinations (Sec. 2(a)(1)(B)).
* If Congress does not approve funds for a forgiveness request within the same fiscal year it is submitted, the request expires and must be resubmitted in future years if the Secretary wants to try again (Sec. 2(c)(3)).
What Changes
The Department of Education loses the authority to create broad student loan forgiveness programs without explicit congressional approval and funding. Any future attempts to forgive federal student loans for groups of borrowers must go through a formal congressional appropriations process.
Important Definitions
Class-based loan forgiveness: Cancellation, waiver, assumption, discharge, reduction, or other forgiveness of student loan obligations applied to groups of two or more borrowers where the total amount exceeds $1,000,000 (Sec. 2(a)(1)(A)).
Covered loan: A loan made, insured, or guaranteed under part B, D, or E of the Higher Education Act (Sec. 2(a)(2)).
II
118TH CONGRESS
1ST SESSION
S. 72
To prevent class-based loan forgiveness for Federal student loans under title
IV of the Higher Education Act of 1965 without the explicit appropria-
tion of funds by Congress for such purpose.
IN THE SENATE OF THE UNITED STATES
JANUARY 25, 2023
Mr. SCOTT of Florida (for himself, Ms. LUMMIS, Mr. BARRASSO, Mrs. BLACK-
BURN, and Mr. BRAUN) introduced the following bill; which was read
twice and referred to the Committee on Health, Education, Labor, and
Pensions
A BILL
To prevent class-based loan forgiveness for Federal student
loans under title IV of the Higher Education Act of
1965 without the explicit appropriation of funds by Con-
gress for such purpose.
Be it enacted by the Senate and House of Representa-
1
tives of the United States of America in Congress assembled,
2
SECTION 1. SHORT TITLE.
3
This Act may be cited as the ‘‘Debt Cancellation Ac-
4
countability Act of 2023’’.
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•S 72 IS
SEC. 2. PROHIBITION ON CLASS-BASED LOAN FORGIVE-
1
NESS WITHOUT PROPER APPROVAL.
2
Part G of title IV of the Higher Education Act of
3
1965 (20 U.S.C. 1088 et seq.) is amended by adding at
4
the end the following:
5
‘‘SEC. 494A. PROHIBITION ON CLASS-BASED LOAN FORGIVE-
6
NESS WITHOUT PROPER APPROVAL.
7
‘‘(a) DEFINITIONS.—In this section:
8
‘‘(1) CLASS-BASED LOAN FORGIVENESS.—
9
‘‘(A) IN GENERAL.—The term ‘class-based
10
loan forgiveness’ means the cancellation, waiver,
11
assumption, discharge, reduction, or other for-
12
giveness of any obligation due on covered
13
loans—
14
‘‘(i) on a class-wide basis and for a
15
class of 2 or more covered loan borrowers;
16
and
17
‘‘(ii)
that
totals
more
than
18
$1,000,000.
19
‘‘(B) EXCEPTION
FOR
EXISTING
TAR-
20
GETED
LOAN
FORGIVENESS
PROGRAMS.—The
21
term ‘class-based loan forgiveness’ does not in-
22
clude a targeted program of loan forgiveness ex-
23
plicitly established under this Act and in effect
24
before January 1, 2022, if the cancellation,
25
waiver, assumption, discharge, reduction, or
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•S 72 IS
other forgiveness of any obligation due on a
1
covered loan is—
2
‘‘(i) granted for a single covered loan
3
borrower who has submitted an application
4
to the Department that includes an attes-
5
tation of compliance with all conditions
6
and requirements of the applicable loan
7
forgiveness program; and
8
‘‘(ii) based upon an individualized,
9
case-by-case determination of the covered
10
loan borrower’s—
11
‘‘(I) eligibility for the targeted
12
loan forgiveness; and
13
‘‘(II) satisfaction of all terms and
14
conditions precedent to receive the
15
targeted loan forgiveness.
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‘‘(2) COVERED LOAN.—The term ‘covered loan’
17
means a loan made, insured, or guaranteed under
18
part B, D, or E.
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‘‘(b) LIMITATION ON DEPARTMENT AUTHORITY.—
20
Notwithstanding any other provision of this Act or any
21
other law, the Secretary shall have no authority to provide
22
class-based loan forgiveness unless funds have been spe-
23
cifically requested and appropriated for the purpose
24
through the process described in subsection (c).
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•S 72 IS
‘‘(c) REQUEST AND APPROPRIATION PROCESS.—
1
‘‘(1) IN
GENERAL.—The Secretary shall not
2
provide any class-based loan forgiveness until—
3
‘‘(A) the Secretary has submitted a request
4
under paragraph (2); and
5
‘‘(B) funds have been specifically appro-
6
priated for such request by Congress through
7
an appropriations Act or other law.
8
‘‘(2) REQUEST.—In any case where the Sec-
9
retary determines class-based loan forgiveness is
10
necessary, the Secretary shall submit to the author-
11
izing committees, the Committee on Appropriations
12
of the Senate, and the Committee on Appropriations
13
of the House of Representatives a written request
14
that describes—
15
‘‘(A) the number of covered loan borrowers
16
in the class and the aggregate amount of the
17
covered student loan obligations that will be
18
cancelled, waived, assumed, discharged, re-
19
duced, or otherwise forgiven through the class-
20
based loan forgiveness;
21
‘‘(B) the particular reason for the class-
22
based loan forgiveness;
23
‘‘(C) the legal authority, including the
24
identification of any authorizing statute or rule,
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•S 72 IS
of the Department to grant such class-based
1
loan forgiveness; and
2
‘‘(D) the particular reason the student
3
loan obligations are being cancelled, waived, as-
4
sumed, discharged, reduced, or otherwise for-
5
given on a collective basis, rather than through
6
a case-by-case assessment.
7
‘‘(3) RESUBMISSION OF REQUEST.—If funds for
8
a class-based loan forgiveness request submitted
9
under paragraph (2) are not specifically appro-
10
priated under an appropriations Act or other law
11
during the fiscal year for which the request is sub-
12
mitted—
13
‘‘(A) the request shall expire; and
14
‘‘(B) if the Secretary desires the request to
15
be reconsidered in a future fiscal year, the Sec-
16
retary shall resubmit the request for such fiscal
17
year.’’.
18
Æ
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