Bill Overview
Title: Stop Reckless Student Loan Actions Act of 2022
Description: This bill limits executive authority to (1) suspend or defer federal student loan payments or interest accrual on such loans, and (2) cancel federal student loans. Specifically, the bill prohibits the President or the Department of Education (ED) from suspending or deferring federal student loan payments or the accrual of interest on such loans for borrowers with annual household incomes over 400% of the federal poverty line. Further, ED may only suspend or defer federal student loan payments or the accrual of interest for such loans for a total of 90 days after the declaration of a national emergency by the President. ED must submit recommendations to Congress on relief necessary for recipients of student financial-aid assistance. Additionally, the bill prohibits the President or ED from cancelling the outstanding balances or portions of balances on student loans due to the COVID-19 national emergency or any other national emergency. Executive or regulatory action to suspend or defer federal student loan payments or to cancel federal student loans shall be subject to congressional review. The bill also revises the definition of affected individual for purposes of the Higher Education Relief Opportunities for Students (HEROES) Act of 2003 to exclude from relief under the act (1) an individual who resides or is employed in an area that is declared a disaster area in connection with a national emergency; or (2) an individual who suffered direct economic hardship as a direct result of a war, military operation, or national emergency.
Sponsors: Rep. Murphy, Gregory [R-NC-3]
Target Audience
Population: Federal student loan borrowers
Estimated Size: 45000000
- The bill affects borrowers of federal student loans specifically, which is approximately 45 million Americans according to recent statistics.
- It limits executive authority to suspend, defer, or cancel federal student loans, so individuals who might benefit from these actions are particularly impacted.
- The legislation specifically targets individuals with a household income over 400% of the federal poverty line for whom previous possibilities of loan suspension or deferral would now be limited.
- The bill states that in the event of national emergencies, the suspension or deferment of loan payments is only allowed for a limited time (90 days), impacting borrowers who may have expected longer relief during such times.
- It affects any federal student loan borrower who might have expected some form of debt cancellation due to the national emergency of COVID-19 or other emergencies, which this bill prohibits.
- According to statistics, about 45 million people in the US have federal student loans, which this legislations addresses.
Reasoning
- The policy mainly affects individuals with federal student loans who have previously benefited from or expected benefits from loan deferment, suspension, or cancellation.
- Borrowers with higher household incomes (over 400% of the federal poverty line) are directly restricted under this policy, potentially experiencing more significant impacts.
- The anticipated relief beneficiaries during national emergencies will now have a limited deferral period, potentially creating stress for those anticipating extended relief.
- Due to the large number of federal student loan borrowers (approximately 45 million), the policy creates a broad spectrum of impacts, yet it will be particularly tangible for those above the income threshold and waiting for relief.
Simulated Interviews
Software Engineer (Austin, Texas)
Age: 34 | Gender: female
Wellbeing Before Policy: 8
Duration of Impact: 5.0 years
Commonness: 8/20
Statement of Opinion:
- I understand the need for budget constraints, but it's frustrating to see options for payment suspension limited.
- In emergency situations, the ability to defer payments was a great relief that now seems more restricted.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 7 | 8 |
| Year 2 | 7 | 8 |
| Year 3 | 6 | 8 |
| Year 5 | 6 | 8 |
| Year 10 | 6 | 8 |
| Year 20 | 6 | 8 |
Graduate Student (New York, New York)
Age: 27 | Gender: male
Wellbeing Before Policy: 6
Duration of Impact: 3.0 years
Commonness: 7/20
Statement of Opinion:
- This doesn't affect me directly now, but it's concerning to see these kinds of protections limited for the future.
- Deferments have been an essential safety net during my education.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 6 | 6 |
| Year 2 | 6 | 7 |
| Year 3 | 6 | 7 |
| Year 5 | 7 | 7 |
| Year 10 | 7 | 7 |
| Year 20 | 7 | 7 |
Healthcare Worker (Los Angeles, California)
Age: 45 | Gender: female
Wellbeing Before Policy: 7
Duration of Impact: 5.0 years
Commonness: 6/20
Statement of Opinion:
- I relied heavily on the deferments during COVID-19 and worry about what might happen if another emergency occurs.
- This seems like a step back in terms of preparedness for national emergencies.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 6 | 7 |
| Year 2 | 6 | 7 |
| Year 3 | 6 | 7 |
| Year 5 | 6 | 7 |
| Year 10 | 7 | 8 |
| Year 20 | 7 | 8 |
Teacher (Atlanta, Georgia)
Age: 50 | Gender: male
Wellbeing Before Policy: 7
Duration of Impact: 3.0 years
Commonness: 5/20
Statement of Opinion:
- I see the reasoning for trying to control costs, but it's difficult knowing that assistance during emergencies is now limited.
- Education and its financial burden seem to be losing focus in policymaking.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 6 | 7 |
| Year 2 | 6 | 7 |
| Year 3 | 7 | 7 |
| Year 5 | 7 | 7 |
| Year 10 | 7 | 8 |
| Year 20 | 7 | 8 |
Graphic Designer (Chicago, Illinois)
Age: 29 | Gender: other
Wellbeing Before Policy: 5
Duration of Impact: 2.0 years
Commonness: 9/20
Statement of Opinion:
- It feels like there's less of a safety net now, which can be intimidating.
- I don't qualify for deferral under income limits, but this could still have indirect impacts on repayment plans.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 5 | 5 |
| Year 2 | 5 | 5 |
| Year 3 | 6 | 6 |
| Year 5 | 6 | 7 |
| Year 10 | 6 | 7 |
| Year 20 | 6 | 7 |
Business Owner (Miami, Florida)
Age: 41 | Gender: female
Wellbeing Before Policy: 8
Duration of Impact: 4.0 years
Commonness: 4/20
Statement of Opinion:
- It's going to be a tighter financial situation without potential relief options in emergencies.
- I'd prefer more personalized assistance rather than blanket policies.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 7 | 8 |
| Year 2 | 7 | 8 |
| Year 3 | 6 | 8 |
| Year 5 | 6 | 8 |
| Year 10 | 6 | 8 |
| Year 20 | 6 | 7 |
Retired Military (Denver, Colorado)
Age: 54 | Gender: male
Wellbeing Before Policy: 7
Duration of Impact: 5.0 years
Commonness: 5/20
Statement of Opinion:
- The pandemic showed how crucial relief options are, and this change worries me about preparedness for future events.
- I believe maintaining flexibility for families like mine is essential.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 6 | 7 |
| Year 2 | 6 | 7 |
| Year 3 | 6 | 7 |
| Year 5 | 6 | 7 |
| Year 10 | 6 | 7 |
| Year 20 | 6 | 7 |
Freelancer (Seattle, Washington)
Age: 36 | Gender: female
Wellbeing Before Policy: 6
Duration of Impact: 4.0 years
Commonness: 7/20
Statement of Opinion:
- I find the limitation during emergencies stressful considering my current financial plan.
- It's something I'll need to prepare better for financially.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 5 | 6 |
| Year 2 | 5 | 6 |
| Year 3 | 5 | 6 |
| Year 5 | 6 | 7 |
| Year 10 | 6 | 7 |
| Year 20 | 6 | 7 |
Entry Level Analyst (San Francisco, California)
Age: 25 | Gender: male
Wellbeing Before Policy: 6
Duration of Impact: 2.0 years
Commonness: 5/20
Statement of Opinion:
- A bit frustrated at losing the potential for deferral convenience, especially when starting my career.
- I hope there are alternative measures considered for future crises.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 6 | 6 |
| Year 2 | 6 | 7 |
| Year 3 | 6 | 7 |
| Year 5 | 6 | 7 |
| Year 10 | 7 | 8 |
| Year 20 | 7 | 8 |
Accountant (Philadelphia, Pennsylvania)
Age: 39 | Gender: female
Wellbeing Before Policy: 7
Duration of Impact: 5.0 years
Commonness: 6/20
Statement of Opinion:
- The uncertainty during emergencies is definitely worrying as we're already tight with finances.
- This change seems like another financial challenge added to our family's responsibilities.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 6 | 7 |
| Year 2 | 6 | 7 |
| Year 3 | 6 | 8 |
| Year 5 | 7 | 8 |
| Year 10 | 7 | 8 |
| Year 20 | 7 | 8 |
Cost Estimates
Year 1: $50000000 (Low: $30000000, High: $70000000)
Year 2: $40000000 (Low: $20000000, High: $60000000)
Year 3: $30000000 (Low: $15000000, High: $50000000)
Year 5: $10000000 (Low: $5000000, High: $20000000)
Year 10: $0 (Low: $0, High: $0)
Year 100: $0 (Low: $0, High: $0)
Key Considerations
- Effects on student loan borrowers' spending capacity and credit ratings.
- The projected reduced fiscal burden on federal budgets due to more consistent loan repayments.
- The potential public response to reduced executive flexibility in debt relief during national emergencies.