President Biden Announces Massive Student Debt Cancellation

In a bold move to alleviate the financial burden on over 277,000 borrowers across the United States, President Joe Biden announced the cancellation of $7.4 billion in student debt. This latest initiative, part of a series of debt relief programs, brings the total amount of student loan cancellation under Biden’s presidency to an impressive $153 billion. The forgiveness is aimed at borrowers in more than 40 states and comes through various income-driven repayment (IDR) plans, including the newly established SAVE program.

“From day one of my Administration, I promised to fight to ensure higher education is a ticket to the middle class, not a barrier to opportunity. I will never stop working to cancel student debt – no matter how many times Republican elected officials try to stop us,” said President Biden. This initiative has largely targeted public service workers, those on IDR plans, borrowers defrauded by their schools, and people with disabilities.

However, the move has not been without criticism. Rep. Virginia Foxx (R-N.C.), chair of the House Education Committee, labeled the administration as “tone-deaf” for focusing on student loan forgiveness over other pressing educational issues.

Legal Battles Loom Over Biden’s Student Loan Forgiveness Plans

Following President Biden’s announcement, a group of Republican-led states, spearheaded by Missouri, has filed a lawsuit to block the administration’s new student loan repayment plan, the SAVE Plan. This legal action marks yet another confrontation between conservative opponents and the Biden administration following a Supreme Court decision that overturned Biden’s first attempt at student loan cancellation.

The lawsuit argues that the President is attempting to impose a costly policy unilaterally, bypassing Congress. The Education Department, however, maintains that it has the authority, granted by Congress in 1993, to define the terms of certain repayment plans. “The Biden-Harris Administration won’t stop fighting to provide support and relief to borrowers across the country — no matter how many times Republican elected officials try to stop us,” said the department in response to the lawsuit.

Central to the legal challenge is the argument that the SAVE Plan, by accelerating the path to loan cancellation, would significantly impact the Missouri Higher Education Loan Authority (MOHELA), depriving it of up to 15 years in servicing fees. The lawsuit also claims that the plan undermines the Public Service Loan Forgiveness program, an important recruitment tool for states.

With over 8 million Americans enrolled in the SAVE Plan, including 4.5 million low-income borrowers with reduced monthly payments, the administration’s efforts signify a substantial shift in the approach to managing student debt. Yet, this shift has ignited a significant legal and political debate, raising questions about the future of student loan forgiveness and the balance of power between the executive branch and Congress.