Saturday 15 July 2023

Biden Administration Forgives $39 Billion In Student Debt

 The Biden administration on Friday announced it will forgive $39 billion in student debt for about 804,000 borrowers.

The debt relief is the result of changes to the student loan system’s income-driven repayment programs. The programs were built to forgive student debt after borrowers have been making payments for at least 20 or 25 years, depending on their loan. However, few borrowers have actually gotten their loans forgiven under that system.

“These fixes are part of the Department’s commitment to address historical failures in the administration of the Federal student loan program,” the Education Department said Friday in a press release.

Leftist lawmakers and activists have long called for broad student debt relief and have urged the Biden administration for years to grant it.

Critics argue that granting student debt relief is unfair to those who sacrificed to pay off their loans, especially since taxpayers ultimately pay for any government-funded debt relief.

In total, the Biden administration has now forgiven more than $116.6 billion in student loans for more than 3.4 million borrowers, the Education Department said. The Biden administration was generous in their interpretation of who is eligible for the student debt relief under the new changes and counted certain people who paused their payments as well as some who had made partial or late payments.

The Education Department’s plan to make changes to the system in order to forgive certain people’s student debt was announced in April of last year. The department plans to notify people soon whether they are eligible to have their loans forgiven under the changes.

“For far too long, borrowers fell through the cracks of a broken system that failed to keep accurate track of their progress towards forgiveness,” Education Secretary Miguel Cardona said in a statement.


“By fixing past administrative failures, we are ensuring everyone gets the forgiveness they deserve, just as we have done for public servants, students who were cheated by their colleges, and borrowers with permanent disabilities, including veterans. This Administration will not stop fighting to level the playing field in higher education,” Cardona said.

The move comes just weeks after the Supreme Court struck down Biden’s $430 billion student debt relief plan, which would have forgiven the student debt of about 37 million people. The high court voted 6-3 that the COVID-era HEROES Act does not give Biden the authority to cancel billions in student loan debt.

“Six States sued, arguing that the HEROES Act does not authorize the loan cancellation plan. We agree,” Chief Justice John Roberts wrote for the majority.

After the court’s decision, Biden said he will “stop at nothing to find other ways to deliver relief to hard-working middle-class families.”

The student debt relief announced Friday is separate from Biden’s debt relief plan that was struck down by the court.

Vice President Kamala Harris said Friday in a statement that she and Biden “will not stop there.”

“Our administration will continue to fight to make sure Americans can access high-quality postsecondary education without taking on the burden of unmanageable student loan debt,” Harris said.

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