Lame-duck Biden unilaterally moves to cancel another $147B in student debt
Lame-duck President Biden is pushing forward with his election-year bid to cancel outstanding federal student debt, with his Education Department announcing Wednesday at least $147 billion in potential loan forgiveness for 23 million student borrowers over the next decade.
As part of a proposed rule, Education Secretary Miguel Cardona could issue waivers for the federal loans, mostly to Pell Grant recipients, as soon as September — less than two months before Election Day 2024. If finalized, the rule would immediately cancel up to $132 billion in student debt.
The department said it “will begin emailing all borrowers with at least one outstanding federally held student loan to provide updates on potential student debt relief, and to inform them they have until August 30 to call their servicer and opt out if they do not want this relief,” according to a press release.
“The rules that would provide this relief are not yet finalized, and the email does not guarantee specific borrowers will be eligible,” it added, noting that so far, 4.8 million students borrowers have had a collective $168 billion in debt canceled.
That includes $69.2 billion for 946,000 borrowers through fixes to Public Service Loan Forgiveness (PSLF); $51 billion for more than 1 million borrowers with income-driven repayment plans; $28.7 billion for more than 1.6 million borrowers whose institutions shuttered or were sued and part of settlements; $14.1 billion for more than 548,000 borrowers with either a partial or total disability; and $5.5 billion for 414,000 borrowers through the Saving on A Valuable Education (SAVE) Plan.
Cardona boasted that the forgiveness would “mark the next milestone in our efforts to help millions of borrowers who’ve been buried under a mountain of student loan interest, or who took on debt to pay for college programs that left them worse off financially, those who have been paying their loans for twenty or more years, and many others.”
“Today, the Biden-Harris administration takes another step forward in our drive to deliver student debt relief to borrowers who’ve been failed by a broken system,” he said in a statement. “The Biden-Harris Administration made a commitment to deliver student debt relief to as many borrowers as possible as quickly as possible, and today, as we near the end of a lengthy rule-making process, we’re one step closer to keeping that promise.”
Top congressional Republicans overseeing the Education Department’s student loan “scheme” — which has already been roundly rejected once by the Supreme Court — denounced the effort as “illegal” and “politically motivated” during an election year.
“I didn’t think this administration could get any more devious or stoop any lower,” said House Education and Workforce Committee chairwoman Virginia Foxx (R-NC) in a statement.
“Overpromising and underdelivering is an undeniable hallmark of this administration,” Foxx declared. “Bottom line, the Biden-Harris administration is using students and borrowers as political pawns knowing its actions are illegal because it cares more about winning elections than helping borrowers.”
Senate Health, Education, Labor and Pensions Committee ranking member Bill Cassidy (R-La.) told The Post that the Biden-Harris student loan schemes do not actually “forgive” debt, but instead push the buck onto others.
“They transfer the burden from those who willingly took out the loans onto Americans who chose to not go to college or already sacrificed to pay off their loans,” Cassidy pointed out. “This is clearly a politically motivated effort to buy votes before the November election at the expense of taxpayers.”
The announcement also comes as federal court rulings have partially struck down the Biden administration’s attempts to move ahead with the debt cancellation ploy.
Earlier this month, a federal appeals court blocked the Education Department from moving forward with administration’s SAVE plan, which has been projected to cost US taxpayers as much as $475 billion alone over the next 10 years.
More than a year ago, the US Supreme Court struck down Biden’s $430 billion forgiveness push, which attempted to bypass Congress in arguing that a 2003 law designed to provide loan relief to veterans of the Iraq war should be broadened to include students affected by the “national emergency” of the COVID-19 pandemic.
A majority of the high court’s conservative justice in that June 2023 ruling determined that the president had unconstitutionally cancelled up to $20,000 in debt for up to 43 million Americans.
