Are congressional staff now the biggest winners in student loan forgiveness?


FFirst, the question was whether to cancel a student loan, then whether to
would be legal
. Now, even though the answer to that last question is “probably not”, the main question is whether anyone will have
stand up to pursue
to prevent forgiveness from passing.

A leading candidate would be either the House or the Senate, but that’s only a possibility if Republicans take control of one of the chambers in January and the loans haven’t already been canceled by then. Even if those two conditions were to be met, however, Republican members may still have to win over some of the program’s biggest beneficiaries: their staff.

This week, the Ministry of Education updated its evolution
on how the loan forgiveness will be administered to meet a poorly covered provision: that those who voluntarily made payments during the current pause on student loan payments will receive this money in addition to the forgiveness of up to $20,000.

The Department clarified the mechanics of this reimbursement process by noting that “reimbursement requests can only be made by you and be reimbursed to you, even if someone else has made a payment on your loan.” This will add complexity in cases where a parent or other family member has helped a borrower repay loans during the pandemic, but perhaps even more so in the case of employers repaying loans.

These provisions are not very common on the whole. According
, and it is likely that the vast majority of these schemes finance job-relevant training rather than the repayment of old loans. However, one group of employers is known to offer loan repayment as a benefit quite frequently: members of Congress. As Policy reported recently, these benefits are widely used and “nearly 2,000 Hill employees are enrolled. . . . The Chamber recently increased the lifetime limit of the benefit from $60,000 to $80,000. Similarly, executive branch personnel working under President Joe Biden may also be eligible for
up to $60,000 in relief

Policy also noted that “the vast majority of Hill employees earn less than the $125,000 threshold set by the White House, making them eligible for $10,000 in federal debt forgiveness and an additional $10,000 s ‘they were Pell Grant recipients’.

But guidance this week from the Department of Education means House and Senate staff could see thousands of dollars in additional relief from this program for payments made since March 2020, all tax-free. Since these employees work for the federal government, taxpayers are paying twice for their forgiveness.

While this is all good business for the staff, it’s important to consider what might happen if Republicans take control of one of the chambers in January. Can House and Senate staff, especially on the Republican side, ignore any perks they may receive as their bosses decide what to do next?

This article originally appeared in the AEIideas blog and is reproduced with the kind permission of the American Enterprise Institute.


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