Amid Supreme Court blockades hindering President Joe Biden’s ambitious student loan forgiveness plans, the administration has not relented in its pursuit of providing relief, prompting mixed reactions and concerns among Americans.
President Biden initially announced a sweeping student debt relief initiative, totaling at least $400 billion, in August 2022. However, the plan faced a setback when the Supreme Court struck it down in June 2023. Despite this setback, the Biden administration has continued to push forward aggressively, executing numerous actions related to student debt, leaving even experts struggling to keep pace with the flurry of activity.
While these moves offer hope to around 40 million individuals burdened by student debt, they have also sparked backlash from those worried about the financial burden falling on taxpayers. There’s also a concern about the implications of forgiving debts, implying unsound financial advice at an individual level, as highlighted by Senator Tim Scott (R-SC) during his now-suspended presidential campaign, who frequently stated, “If you take out a loan, you pay it back.”
Here are three instances where President Biden forgave student loan debt despite the Supreme Court’s ruling:
July 14: $39 billion
Shortly after the Supreme Court’s decision, the administration announced the transfer of $39 billion in debt owed by 804,000 borrowers. This action aimed to rectify issues within income-driven repayment plans, including accounting for partial, late, and deferred payments towards the program’s completion. Education Secretary Miguel Cardona highlighted that this move aimed to address the systemic failures that caused borrowers to fall through the cracks of the flawed system.
Oct. 4: $9 billion
In October, the Biden administration forgave another $9 billion in student debt, benefiting 125,000 borrowers. This action was presented as rectifying issues within income-driven repayment and Public Service Loan Forgiveness programs, alongside providing automatic relief for borrowers with disabilities. The total debt cancellation under Biden’s tenure reached $127 billion for nearly 3.6 million Americans.
Dec. 6: $4.8 billion
President Biden announced an additional $4.8 billion cancellation under the Public Service Loan Forgiveness program, targeting debt held by 53,000 individuals. The relief focused on fixing income-driven repayment plans for individuals carrying student debt for 20 years or more but still burdened with repayments, along with an additional $1.2 billion for borrowers with disabilities. This brought the total debt cancellation to $132 billion for over 3.6 million Americans through various actions.
President Biden hinted at further cancellations in 2024, with the Education Department considering regulations to facilitate more loan forgiveness, particularly focusing on groups facing significant financial hardship, those with loans from past decades, individuals whose college experiences didn’t yield sufficient financial value, and those eligible for relief programs yet to apply.
