Home Updates Politics Biden Government Announced $39b in Student Loan Forgiveness

Biden Government Announced $39b in Student Loan Forgiveness

In a necessary declaration, the Biden administration revealed on Friday that a staggering $39 billion worth of student debt would be eradicated for around 804,000 borrowers.

Biden Administration Unveils $39b Student Loan Forgiveness

Joe Biden administration has recently announced a significant step towards fulfilling a key campaign promise by eliminating approximately $39 billion in student debt. On Friday, the Department of Education announced that it would impact nearly 804,000 borrowers enrolled in federal income-driven repayment plans, which adjust monthly payment amounts based on income and family size. Moreover, the department has characterized this decision as an attempt to rectify past injustices.

Under the current regulations, borrowers become eligible for student loan forgiveness after completing 240 to 300 monthly payments, equivalent to around 20 to 25 years. Following this timeframe, the remaining debt is typically forgiven. However, the department highlighted that those inaccuracies in payment counts have resulted in borrowers losing progress toward loan forgiveness, which they rightfully earned.

In a press release on Friday, James Kvaal, the Under Secretary of Education, expressed the administration’s commitment to addressing the issue Kvaal stated, “At the beginning of this Administration, numerous borrowers had earned loan forgiveness but were never granted it.” Today, we are fulfilling our promise to borrowers who have diligently made repayments for decades.”

Setback from Supreme Court

However, the recent move by the Biden administration represents their ongoing efforts to fulfill a fundamental aspect of their domestic economic agenda: alleviating the burden of student debt for numerous households. Despite this objective, the administration faced a significant setback last month when the Supreme Court ruled that they needed to possess the constitutional authority to eliminate nearly $400 billion in student debt.

President Biden had intended to exercise the powers granted by the Higher Education Relief Opportunities for Students Act of 2003, enabling the Secretary of Education to provide waivers or relief to financial aid recipients during national emergencies. Biden introduced a plan in August 2022, citing the COVID-19 pandemic, to eliminate federal student loan debt ranging from $10,000 to $20,000 for borrowers with an annual income below $125,000.

During his plan announcement, the U.S. president eliminated that approximately 43 million individuals would benefit from this initiative. However, with its conservative majority, the Supreme Court ruled 6-3 that the plan exceeded the scope of Biden’s executive authority. The court’s conservative majority argued that the government lacked “clear congressional authorization” for the proposed debt relief program. Nevertheless, Biden responded defiantly to the court’s decision, reaffirming it as “a mistake.”

In a speech on June 30, the president acknowledged the disappointment, discouragement, and even anger felt by millions of Americans regarding the Supreme Court’s decision on student debt. He openly admitted that he shared those sentiments as well.

President Biden placed blame on his Republican counterparts for obstructing the program while simultaneously advocating for tax cuts favoring the wealthy. Furthermore, he criticized Republican officials, accusing them of unwillingly supporting working-class and middle-class Americans in their pursuit of relief. Despite this setback, Biden pledged to explore alternative avenues for addressing student debt and providing much-needed relief.

Emphasizing ‘Bidenomics’ During Reelection Campaign

Amidst his campaign for reelection in the 2024 presidential race, President Biden has been actively promoting his economic platform, known as “Bidenomics,” to the voters, despite facing criticism regarding high inflation and government spending. As of 2022, the White House estimated the outstanding federal student loan debt to be approximately $1.6 trillion, impacting nearly 45 million individuals. However, Republicans wasted no time criticizing the latest debt-relief initiative announced on Friday, asserting that it exemplified another instance of the Biden administration overstepping its authority.

Biden Government Announced $39b in Student Loan Forgiveness
Biden Government Announced $39b in Student Loan Forgiveness
Source: Web

Representative Lisa McClain of Michigan took to Twitter to express her opposition, labeling Biden’s loan forgiveness plan unconstitutional and a disservice to hard-working taxpayers who diligently repaid their student loans. She affirmed her unwavering commitment to fighting against this perceived overreach. Notably, even fellow Democrat and rival presidential candidate Marianne Williamson joined in the criticism, sarcastically assuring students that they would eventually receive relief, albeit after a long waiting period of 20 or 25 years.

Criticism Mounts Over Student Loan Forgiveness Efforts

Friday’s announcement faced criticism from Republican quarters, partly due to its timing, just two weeks after the Supreme Court rejected a broader plan by the Biden administration. The rejected plan aimed to forgive over $400 billion in federal student loan debt and would have provided relief of up to $20,000 for millions of borrowers who met specific income criteria.

The administration based its argument on the authority granted by the Higher Education Relief Opportunities for Students Act of 2003 to forgive debt. However, critics contended that the plan unfairly burdened taxpayers with the unpaid debt of others, portraying it as an attempt to exploit legislative loopholes and push through sweeping changes that Congress was unlikely to approve.

Read Also: Judge Dismissed Republican Challenge Against Student Loan Forgiveness