Bill Overview
Title: Debt Cancellation Accountability Act of 2022
Description: This bill prohibits the Department of Education from providing class-based loan forgiveness unless funds have been specifically requested and appropriated for this purpose. Class-based loan forgiveness refers to the cancellation, waiver, assumption, discharge, reduction, or other forgiveness of any obligation due on Federal Family Education Loans, Federal Direct Loans, or Federal Perkins Loans (1) on a class-wide basis and for a class of two or more loan borrowers, and (2) that totals more than $1 million. The prohibition does not apply to targeted loan forgiveness programs established under the Higher Education Act of 1965 and in effect before the enactment of this bill if the loan forgiveness is granted for a single borrower on a case-by-case basis.
Sponsors: Sen. Scott, Rick [R-FL]
Target Audience
Population: Student loan borrowers with federal loans
Estimated Size: 43000000
- Class-based loan forgiveness typically aims to address burdens faced by a large number of student loan borrowers who share similar characteristics or circumstances.
- The student loan system in the U.S. includes millions of borrowers holding federal loans, comprising the Federal Direct Loans, Federal Family Education Loans, and Federal Perkins Loans.
- The legislation targets a subset of that population by limiting broad class-based forgiveness, which could have included programs affecting millions if funds were specifically requested and appropriated.
- The U.S. has approximately 43 million student loan borrowers as of 2023, but the exact number affected would depend on the scope of the class-based forgiveness initiatives, which are not widely applied.
Reasoning
- This policy primarily limits new broad class-based loan forgiveness plans, implying immediate impacts may be low but long-term effects could differ based on potential future policies negated by this Act.
- Only some loan borrowers would be impacted, specifically if they were expecting potential benefits from large-scale forgiveness programs not yet funded or explicitly legislated.
- Loan borrowers might not feel the effects of this Act directly if they were not actively tracking or depending on policy changes for debt relief.
- The target population is diverse in terms of demographics, but not every borrower is impacted the same due to differences in debt amounts, payment plans, income levels, and personal expectations.
Simulated Interviews
Graphic Designer (Los Angeles, CA)
Age: 25 | Gender: female
Wellbeing Before Policy: 5
Duration of Impact: 5.0 years
Commonness: 15/20
Statement of Opinion:
- I was hoping for some relief based on talks about class-based forgiveness, but I'm not holding my breath now.
- This policy doesn't seem like it will change my situation immediately, but I feel like it's blocking potential help.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 5 | 5 |
| Year 2 | 5 | 5 |
| Year 3 | 5 | 6 |
| Year 5 | 5 | 6 |
| Year 10 | 5 | 6 |
| Year 20 | 6 | 7 |
Public School Teacher (Chicago, IL)
Age: 32 | Gender: male
Wellbeing Before Policy: 6
Duration of Impact: 0.0 years
Commonness: 12/20
Statement of Opinion:
- I wasn't expecting any broad forgiveness because I've been focused on PSLF which seems to remain unaffected.
- The policy is a bit worrying if it cuts off other options, but my main plan is still intact.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 6 | 6 |
| Year 2 | 6 | 6 |
| Year 3 | 7 | 7 |
| Year 5 | 7 | 7 |
| Year 10 | 8 | 8 |
| Year 20 | 8 | 8 |
Entrepreneur (New York, NY)
Age: 45 | Gender: male
Wellbeing Before Policy: 4
Duration of Impact: 0.0 years
Commonness: 20/20
Statement of Opinion:
- I have managed the debt over the years without expecting any sort of bailout.
- This policy doesn't seem to change much for me, it's just status quo.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 4 | 4 |
| Year 2 | 4 | 4 |
| Year 3 | 4 | 4 |
| Year 5 | 4 | 4 |
| Year 10 | 5 | 5 |
| Year 20 | 5 | 5 |
Tech Support Specialist (Austin, TX)
Age: 29 | Gender: female
Wellbeing Before Policy: 5
Duration of Impact: 10.0 years
Commonness: 8/20
Statement of Opinion:
- Any promise of class-based forgiveness felt like a far-off hope, so this policy is just another gripping reality.
- I'm disappointed there's a step away from broader relief options.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 4 | 5 |
| Year 2 | 5 | 6 |
| Year 3 | 5 | 6 |
| Year 5 | 6 | 7 |
| Year 10 | 6 | 7 |
| Year 20 | 7 | 7 |
Nurse (Phoenix, AZ)
Age: 54 | Gender: female
Wellbeing Before Policy: 7
Duration of Impact: 5.0 years
Commonness: 7/20
Statement of Opinion:
- I'm nearing retirement, so changes like this could theoretically affect my finances, but I'm not sure how directly.
- Retirement is my focus, less on changes around the loans.
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 | 7 | 8 |
| Year 10 | 7 | 8 |
| Year 20 | 7 | 8 |
Sales Associate (Columbus, OH)
Age: 22 | Gender: male
Wellbeing Before Policy: 6
Duration of Impact: 10.0 years
Commonness: 16/20
Statement of Opinion:
- I was really hoping for some broad relief post-graduation; now, it seems more distant.
- I feel like my path forward will have to involve gradual repayments without any bigger aid.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 5 | 6 |
| Year 2 | 5 | 6 |
| Year 3 | 6 | 7 |
| Year 5 | 6 | 7 |
| Year 10 | 7 | 8 |
| Year 20 | 7 | 8 |
Administrative Assistant (Atlanta, GA)
Age: 37 | Gender: female
Wellbeing Before Policy: 4
Duration of Impact: 20.0 years
Commonness: 10/20
Statement of Opinion:
- Financially, it's a struggle, and knowing broad relief is unlikely makes it tougher.
- I feel like I have to manage this substantial debt completely alone now.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 3 | 4 |
| Year 2 | 3 | 5 |
| Year 3 | 4 | 6 |
| Year 5 | 4 | 6 |
| Year 10 | 5 | 7 |
| Year 20 | 5 | 7 |
Software Engineer (Minneapolis, MN)
Age: 43 | Gender: male
Wellbeing Before Policy: 8
Duration of Impact: 0.0 years
Commonness: 11/20
Statement of Opinion:
- Given my current salary, loan forgiveness seemed like a nice-to-have rather than a need.
- The policy is unlikely to affect my lifestyle or plans.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 8 | 8 |
| Year 2 | 8 | 8 |
| Year 3 | 8 | 8 |
| Year 5 | 8 | 8 |
| Year 10 | 9 | 9 |
| Year 20 | 9 | 9 |
Freelance Writer (Seattle, WA)
Age: 27 | Gender: other
Wellbeing Before Policy: 5
Duration of Impact: 0.0 years
Commonness: 13/20
Statement of Opinion:
- My main focus is on immediate income, so I didn't count too much on student loan forgiveness.
- This policy doesn't change my prospects a lot.
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 | 6 |
| Year 10 | 6 | 6 |
| Year 20 | 7 | 7 |
Marketing Manager (Miami, FL)
Age: 30 | Gender: female
Wellbeing Before Policy: 6
Duration of Impact: 10.0 years
Commonness: 14/20
Statement of Opinion:
- I'm aware things like class-based forgiveness are complex and often political.
- The fact this gets checked makes it more certain I'll continue to pay each dollar of my loans.
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 |
Cost Estimates
Year 1: $0 (Low: $0, High: $0)
Year 2: $0 (Low: $0, High: $0)
Year 3: $0 (Low: $0, High: $0)
Year 5: $0 (Low: $0, High: $0)
Year 10: $0 (Low: $0, High: $0)
Year 100: $0 (Low: $0, High: $0)
Key Considerations
- The policy does not eliminate the possibility of loan forgiveness altogether; it simply ensures accountability by requiring specific appropriations for class-wide cancellations.
- Potentially affected borrowers might face continued financial strain without class-based forgiveness, highlighting the trade-off between fiscal responsibility and borrower relief.
- Congress retains the ability to fund specific forgiveness programs, potentially affecting long-term planning for debt relief efforts through legislative processes.
- Administrative mechanisms remain in place for individually-based loans before this bill's enactment, ensuring that not all forms of relief are impacted.