House Republicans are pushing for an emergency bill to reinstate a nationwide moratorium on the issuance of new fha loans to families with $1 million or more in student loan debt.
The House Energy and Commerce Committee on Tuesday sent a letter to Treasury Secretary Wilbur Ross to urge him to immediately lift the moratorium.
It would allow the federal government to issue new loans to borrowers with up to $1.6 million in student debt, up from $800,000 under the moratorium in place since March.
Ross and the White House have argued that fha is the only loan product with a high probability of default, but experts say that claim has no basis in fact.
FHA loan limits are currently set at $250,000 for families, but there is a $1,500 cap for certain types of loans, such as Stafford loans.
Congressional Democrats have been pressing the Trump administration to lift the cap, arguing that the Trump tax bill has left students without a path to a loan, and that many students have been forced to delay starting college to save for college.
Some lawmakers have also urged Congress to pass a new version of the Student Loan Interest Deduction Act, which they say will increase the number of Americans who can claim the tax credit.
Democrats in Congress have pushed to extend the moratorium for several years, and Democrats are also trying to pass an extension of a separate federal tax credit for low- and moderate-income Americans.
Republicans have been pushing to extend it indefinitely, and on Monday, Rep. Chris Collins (R-NY) introduced legislation that would extend the temporary ban on new student loans to 2021.
But Democrats are wary of a bill that would end up providing additional tax breaks for the wealthy.