What This Bill Does
This bill requires Congress to specifically approve and provide money before the Secretary of Education can cancel student loans for a group of borrowers. The bill prevents broad loan forgiveness programs unless Congress passes a separate law to fund them. It applies to federal student loans made under specific parts of the Higher Education Act of 1965.
Who It Affects
The Secretary of Education is directly affected by this bill's requirements. Federal student loan borrowers could be affected if they would have received loan forgiveness. Congress's Appropriations Committees would need to review and approve any loan forgiveness requests.
Key Provisions
• The Secretary cannot provide class-based loan forgiveness (cancellation or reduction of multiple borrowers' loans as a group) unless Congress specifically appropriates funds for that purpose through a law (Sec. 2(b))
• Before canceling group loans, the Secretary must submit a written request to Congress explaining how many borrowers are affected, the total amount being forgiven, the reason for the forgiveness, the legal authority for it, and why it must be done as a group rather than case-by-case (Sec. 2(c)(2))
• Class-based loan forgiveness means canceling, waiving or reducing loan obligations for 2 or more borrowers totaling more than $1,000,000 (Sec. 2(a)(1)(A))
• Existing loan forgiveness programs that were officially established before January 1, 2022 are not covered by this bill if forgiveness is decided case-by-case based on individual borrower eligibility (Sec. 2(a)(1)(B))
• If Congress does not provide funds for a loan forgiveness request during the 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 Secretary of Education loses the ability to forgive student loans for groups of borrowers without first getting Congress to pass a law giving money for that purpose. The Secretary must follow a new process of submitting detailed requests to Congress before any group loan forgiveness can happen.
Important Definitions
"Class-based loan forgiveness" means canceling, waiving, assuming, discharging, reducing or otherwise forgiving loan obligations for 2 or more borrowers that totals more than $1,000,000.
"Covered loan" means a loan made, insured or guaranteed under specific parts of the Higher Education Act.
I
118TH CONGRESS
1ST SESSION
H. R. 509
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 HOUSE OF REPRESENTATIVES
JANUARY 25, 2023
Mr. DAVIDSON (for himself, Mr. BIGGS, Mr. DONALDS, Mr. ROY, Mr. BISHOP
of North Carolina, Mrs. LESKO, Mr. GUEST, Mr. CAREY, Mr. NORMAN,
Mr. WEBER of Texas, Mr. TIFFANY, and Mr. BALDERSON) introduced
the following bill; which was referred to the Committee on Education and
the Workforce
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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•HR 509 IH
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.—
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‘‘(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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•HR 509 IH
other forgiveness of any obligation due on a
1
covered loan is—
2
‘‘(i) granted for a single covered loan
3
borrower; and
4
‘‘(ii) based upon an individualized,
5
case-by-case determination of the covered
6
loan borrower’s—
7
‘‘(I) eligibility for the targeted
8
loan forgiveness; and
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‘‘(II) satisfaction of all terms and
10
conditions precedent to receive the
11
targeted loan forgiveness.
12
‘‘(2) COVERED LOAN.—The term ‘covered loan’
13
means a loan made, insured, or guaranteed under
14
part B, D, or E.
15
‘‘(b) LIMITATION ON DEPARTMENT AUTHORITY.—
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Notwithstanding any other provision of this Act or any
17
other law, the Secretary shall have no authority to provide
18
class-based loan forgiveness unless funds have been spe-
19
cifically requested and appropriated for the purpose
20
through the process described in subsection (c).
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‘‘(c) REQUEST AND APPROPRIATION PROCESS.—
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‘‘(1) IN
GENERAL.—The Secretary shall not
23
provide any class-based loan forgiveness until—
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•HR 509 IH
‘‘(A) the Secretary has submitted a request
1
under paragraph (2); and
2
‘‘(B) funds have been specifically appro-
3
priated for such request by Congress through
4
an appropriations Act or other law.
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‘‘(2) REQUEST.—In any case where the Sec-
6
retary determines class-based loan forgiveness is
7
necessary, the Secretary shall submit to the author-
8
izing committees, the Committee on Appropriations
9
of the Senate, and the Committee on Appropriations
10
of the House of Representatives a written request
11
that describes—
12
‘‘(A) the number of covered loan borrowers
13
in the class and the aggregate amount of the
14
covered student loan obligations that will be
15
cancelled, waived, assumed, discharged, re-
16
duced, or otherwise forgiven through the class-
17
based loan forgiveness;
18
‘‘(B) the particular reason for the class-
19
based loan forgiveness;
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‘‘(C) the legal authority, including the
21
identification of any authorizing statute or rule,
22
of the Department to grant such class-based
23
loan forgiveness; and
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•HR 509 IH
‘‘(D) the particular reason the student
1
loan obligations are being cancelled, waived, as-
2
sumed, discharged, reduced, or otherwise for-
3
given on a collective basis, rather than through
4
a case-by-case assessment.
5
‘‘(3) RESUBMISSION OF REQUEST.—If funds for
6
a class-based loan forgiveness request submitted
7
under paragraph (2) are not specifically appro-
8
priated under an appropriations Act or other law
9
during the fiscal year for which the request is sub-
10
mitted—
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‘‘(A) the request shall expire; and
12
‘‘(B) if the Secretary desires the request to
13
be reconsidered in a future fiscal year, the Sec-
14
retary shall resubmit the request for such fiscal
15
year.’’.
16
Æ
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