Debt Cancellation Accountability Act of 2023 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 explicitly established under the Higher Education Act of 1965 and in effect before January 1, 2022, if the loan forgiveness is granted for a single borrower on a case-by-case basis.
The bill significantly impacts how the Department of Education can respond to student loan forgiveness requests. By imposing a requirement for congressional approval and appropriated funds, it intends to create a more accountable framework for loan forgiveness. This legislation could lead to more rigorous scrutiny of any proposals for wide-scale debt cancellation, thereby potentially slowing down or hindering efforts that might alleviate the burden of student loans across large groups of borrowers.
Senate Bill 72, titled the 'Debt Cancellation Accountability Act of 2023', seeks to restrict the ability of the U.S. Department of Education to enact class-based loan forgiveness for federal student loans unless there are explicit appropriations of funds by Congress for such actions. This bill aims to tighten the controls over how and when student debt can be forgiven, particularly targeting broad class-based forgiveness that could apply to groups of borrowers rather than on an individual basis. It stipulates that no class-based forgiveness can take place without prior funding being appropriated through a formal legislative process.
There are notable points of contention surrounding SB72. Supporters argue that it promotes fiscal responsibility and ensures that any significant forgiveness initiatives are funded and vetted by Congress, thus preventing unexpected financial liabilities on the federal budget. Opponents, however, may view this as a move to limit access to needed relief for borrowers, arguing that it could perpetuate student debt distress and create barriers for those seeking forgiveness that is justified under targeted relief programs. The balance between controlling expenditures and enabling educational access remains a central debate within this legislative initiative.