As of January 13, 148 Democrats support Resolution 76 overturning the 2019 Student Loan Forgiveness Rule.

This rule is the “rules of the road” for the borrower defense program, scheduled to take effect July 1. The House has stated that the rule, (replacing the 2016 Obama era rule) puts the burden on borrowers and limits potential relief. It also provided $11.1 billion less in aid compared to its predecessor. Overturning the 2019 rule will alleviate those burdens by returning to:

  • allowing the department to forgive student loans for students at schools that close, if they don’t enroll in another program within three years;
  • allowing automatic discharges for groups and not forcing them to apply individually (as the 2019 rule requires);
  • allowing for a longer than a three-year statute of limitation on claims;
  • and barring schools from requiring students to sign pre-dispute arbitration agreements.

H.J. Res. 76 was introduced on September 26, 2019, and was referred to the House Education and Labor Committee. The House may consider it as soon as January 15th. A simple majority would be required for passage. The White House has made a statement that they oppose the measure, and the president’s advisors recommend he veto H.J. Res. 76.

We will continue to watch this, as many of the families that work in our Creditors’ Rights practice have family facing student debt. Be aware that this is an update, this is not passed into law at this time.

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