Biden tries to forgive student loans, again
Plan would cut debts for 25 million borrowers
If you think the president’s newest plan to forgive student debts is a bad idea, now’s your chance to say something.
The details of President Joe Biden’s plan to forgive some debts for millions of student loan borrowers will open for public comment on Wednesday and, according to the Department of Education, the new forgiveness proposal only adds to the $153 billion in student loan debt already forgiven by the Biden Administration.
Announced last week in Madison, Wisconsin — and hatched not long after his last attempt at the maneuver was blocked by the nation’s highest court — Biden’s new plan would see debts eliminated or reduced for about 25 million Americans, many of them from communities disproportionately at risk of going into debt in pursuit of higher education.
“Today’s announcement shows that the Biden-Harris Administration is continuing to fulfill our promises to fix a broken higher education system,” U.S. Secretary of Education Miguel Cardona said in a statement. “Student loan forgiveness isn’t only about relief for today’s borrowers. It’s about social mobility, economic prosperity, and creating America that lives up to its highest ideals.”
If implemented as currently written, the rules, which will be published the Federal Register for the start of a 30-day comment period, would cancel up to $20,000 in interest accrued by borrowers who owe more than they were originally lent and potentially eliminate the debts of borrowers who entered repayment two decades or more ago.
“Under our new proposal, if you owe more now than when you first started paying your student loans, we would cancel up to $20,000 in runaway interest. And for lowand middle-class families enrolled in my SAVE plan, we would cancel all of your interest,” Biden said in social media postings.
Under the president’s revived plan the Department of Education would automatically discharge the debt of borrowers who qualify but have not applied for debt forgiveness under other available federal programs, and provide assistance to borrowers who took out loans for degrees that didn’t lead to jobs or in order to attend poorly regarded institutions.
A further, as yet unpublished, rule will provide relief to borrows at risk of defaulting on their loan payments due to other unforeseen circumstances.
“These distinct forms of debt relief are designed for borrowers struggling with their loans — and that’s a lot of people,” Under Secretary of Education James Kvaal said in a statement. “There are 25 million borrowers whose interest is growing faster than they can pay it down. That fact alone shows how badly President Biden’s student loan relief is needed.”
Biden’s move to forgive some student debt is inline with his campaign promises on the matter but out of step with a June determination by the U.S. Supreme Court that his earlier plan to forgive up to $10,000 in debt for all borrowers damaged the state of Missouri, due their hosting a private company that collects on defaulted student debt. The court also found the plan was outside the scope of the Secretary of Education’s authority under the HEROES Act of 2003.
“As we have already shown, the HEROES Act provides no authorization for the Secretary’s plan even when examined using the ordinary tools of statutory interpretation— let alone “clear congressional authorization” for such a program,” the court wrote last year.
According to the Education Data Initiative, student borrowers owed a combined $1.7 trillion as of March. Almost 93% of it, or $1.6 trillion, is debt owned by the federal government.