CALL HIM ‘DOUGH’ BIDEN
'Cancels $7.4B more in student loan debt
The Biden administration is canceling another $7.4 billion in student loans for 277,000 borrowers, amounting to $153 billion in total debt forgiveness approved by the president.
The move was in defiance of the Supreme Court, which shot down an earlier Biden scheme to forgive student loans as illegal. Critics also said it amounted to the president trying to buy votes ahead of November’s election.
The Education Department announced Friday that it had approved the extra loan cancellations for almost 4.3 million student borrowers nationwide through its Saving on a Valuable Education (SAVE) plan.
“Today’s announcement shows — once again — that the BidenHarris Administration is not letting up its efforts to give hardworking Americans some breathing room,” Education Secretary Miguel Cardona said in a statement.
‘Shifting burden’
But critics of the move have often pointed out the financial burden is only being shifted to the majority of US taxpayers who do not have some sort of college degree.
“The administration is tone deaf. There’s no other way to put it,” said House Education and Workforce Committee Chairwoman Virginia Foxx, who criticized the Education Department for botching its federal student-aid programs while prioritizing the debt cancellation “scheme.”
“That has been frustrating, especially since it has jeopardized the academic journey of millions of students,” Foxx (R-NC) said. “But what is absolutely maddening is that the administration is STILL not doing its job and instead focusing on its student-loan shenanigans.”
Under the Biden administration’s various student-loan cancellation programs, at least 10% of borrowers have “now been approved for some debt relief,” according to the Education Department, making good on a 2020 campaign promise from the president.
Biden, 81, began the incomedriven repayment plan after the Supreme Court struck down his $430 billion student-debt cancellation gambit for more than 40 million borrowers in June 2023 — but
the SAVE plan is expected to cost US taxpayers even more.
According to a Penn Wharton Budget Model estimate, SAVE costs will soar to $475 billion over the next 10 years.
States’ challenges
The Republican attorneys general of Kansas and Missouri are already challenging the plan with federal lawsuits that are backed by their opposite numbers in Alabama, Alaska, Idaho, Iowa, Louisiana, Montana, Nebraska, South Carolina, Texas and Utah.
“Last time Defendants tried this the Supreme Court said that this action was illegal,” the lawsuit states. “Nothing since then has changed, other than introducing more legal errors into this Rule’s underlying analysis.”
A recent court filing by Kansas AG Kris Kobach added that it was “unrealistic to think that any loan forgiveness that occurs during this litigation will ever be clawed back.”
The SAVE plan is already serving at least 8 million student borrowers, allowing many to make lower payments and some to make no payments on their debt until their income rises above a certain threshold.
Under the plan, borrowers who originally took out $12,000 or less in loans are eligible for forgiveness after 10 years. Those with more than $12,000 can get cancellation but on a longer timeline.
For each $1,000 borrowed beyond $12,000, it adds an additional year of payments on top of 10 years.
On Friday, the administration also said it’s canceling loans for 65,000 borrowers who are enrolled in older income-driven repayment plans and hit the finish line for forgiveness. It also announced cancellation for another 5,000 borrowers through the Public Service Loan Forgiveness program.
That’s on top of a pledge Biden and Vice President Kamala Harris made to voters in the swing states of Wisconsin and Pennsylvania earlier this week to cancel up to $20,000 in accrued interest for more than 25 million debtors who went to college.