Biden administration to cancel another $1.2B of student loans
The White House said Wednesday it is canceling $1.2 billion worth of student loans for some 153,000 people, moving forward with a piecemeal solution to its debt forgiveness pledge after the Supreme Court struck down an earlier scheme to cancel $430 billion.
“With today’s announcement, we are once again sending a clear message to borrowers who had low balances: if you’ve been paying for a decade, you’ve done your part, and you deserve relief,” Education Secretary Miguel Cardona said in a statement.
“Under President Biden’s leadership, our Administration has now approved loan forgiveness for nearly 3.9 million borrowers, and our historic fight to cancel student debt isn’t over yet.”
This past June, the high court struck down the Biden administration’s attempt to cancel $430 billion in loans for 43 million student borrowers under a 2003 law meant to financially assist veterans of the Iraq and Afghanistan wars.
The law — the Higher Education Relief Opportunities for Students (HEROES) Act — was subsequently widened to cover other federal student loans during national emergencies.
The Department of Education argued that the COVID-19 pandemic constituted such an emergency due to its economic consequences — despite Biden, 81, ending the national emergency declaration for the pandemic on May 11, 2023.
The high court ruled Cardona lacked “‘clear congressional authorization’ to justify the challenged program.”
The Education Department has since pushed other loan cancellation gambits through existing programs, canceling some $138 billion in student debt for nearly 3.9 million people through executive actions, the White House said.
That figure includes $39 billion in loan forgiveness for student borrowers on income-driven repayment plans for 20 years or 25 years; $9 billion for public service workers, others with income-driven repayment plans, and those with disabilities; and $5 billion for others on existing federal loan programs.
The Penn Wharton Budget Model last year calculated that the loan forgiveness based on the Biden administration’s income-driven repayment plan will cost US taxpayers $475 billion over 10 years.
The latest announcement applies to people enrolled in a repayment program known as Saving on a Valuable Education (SAVE) and covers those who borrowed $12,000 or less who have been repaying the money for at least 10 years.
The move will “particularly help community college and other borrowers with smaller loans and put many on track to being free of student debt faster than ever before,” the White House said.
Left-leaning progressive and young voters, whose support Biden needs to win re-election in November, have been vocal in advocating for student loan forgiveness on a wide scale.
While previous Republican administrations have pushed forward their own plans for student debt write-offs, some GOP critics say the forgiveness scheme is unfair to borrowers who have already repaid their loans or those who never attended colleges or universities.
“In the last three years, the Biden administration’s Department of Education has put considerable time and resources to prioritize their student loan schemes,” Senate Health, Education, Labor and Pensions Committee ranking member Bill Cassidy (R-La.) said earlier this month. “But they’ve been unable to fulfill their basic responsibilities mandated by Congress and essential to American families.”
Cassidy noted last year that the Biden administration’s income-driven repayment proposal would transfer “the burden of $559 billion in federal student loans to the 87% of Americans who chose not to go to college, paid their way, or already responsibly paid off their loans.”
“The president’s student loan policies are not a fix — they are merely a Band-Aid that forces taxpayers to shoulder the responsibility of paying off someone else’s debt,” he said in a November 2023 statement.
