Biden Administration to 'Fix' Student Loan Program by Forgiving $39 Billion in Loans

AP Photo/Susan Walsh

Because Democrats tend to see the Constitution as an obstacle instead of a guide and because the 2024 presidential election cycle is heating up, the Biden administration seems to have found a way to work around the recent Supreme Court decision that struck down Joe Biden’s plan to slash student debt. After the Court ruled the plan unconstitutional, Biden issued a statement saying, “This fight is not over.” Miraculously, the administration has found the student loan program to be rife with “mistakes,” and plans to correct it.

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As a result of the correction, 804,000 borrowers with outstanding debt of roughly $39 billion total will be wiped off the books.

The assistance will come in the form of tweaks to the system’s income-based repayment plans. Under the new and improved system, anyone who has been paying on loans for 20-25 years, depending on what kind of loan they took out and the initial repayment plan, will have any remaining debt canceled by the government. The administration claims that mistakes were made in payments accounted for that would have brought the borrower closer to payment in full on the debt. Education Secretary Miguel Cardona said of the changes, “For far too long, borrowers fell through the cracks of a broken system that failed to keep accurate track of their progress towards forgiveness.”

In order to qualify for the new forgiveness plan, the Biden administration is now counting payments from borrowers who had paused payments due to certain deferments and forbearances. Also included are those who made partial or late payments.

While the Supreme Court’s decision on the student loan program was a huge blow to Joe Biden and Democrats early in the election season, Persis Yu, deputy executive director at the Student Borrower Protection Center, may have let the cat out of the bag on any possible future plans regarding student loan forgiveness the administration may have by saying:

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″[M]ake no mistake — over 804,000 people are receiving relief with this action because of 804,000 failures — and this is only the tip of the iceberg. Working people have been made collateral damage by a dysfunctional student loan system.”

So what is the difference between the plan the Supreme Court deemed unconstitutional and the new one? The previous plan was based on the Heroes Act of 2003, passed following the 9/11 attacks. The Act granted wide power to the President to amend student loan programs during a national emergency. The COVID-19 pandemic fell under the national emergency category. However, Biden declared the pandemic emergency over in April. The new plan is to use the Higher Education Act, which gives the Secretary of Education broader authority to wave or wipe away borrowers’ student loan debt.

Joe Biden has seen plenty of pressure from the left and Democrats to get some sort of student loan forgiveness done.

Squad member Rep Ilhan Omar (D-MN) said, “Every option needs to be on the table.” Fellow squad member Rep. Ayanna Pressley (D-MA) stated, “I am calling on President Biden and Secretary Cardona to use other tools available to them to swiftly cancel student debt,” and Sen. Alex Padilla (D-CA) said, “While the Supreme Court closed the door to this approach, I refuse to believe there’s no path forward.”

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Republicans and other Americans who have managed to pay their own student loans off are seeing this as nothing more than an election-year vote-buying scheme. The GOP has put forth several pieces of legislation that would make sure that potential borrowers know exactly what they are getting into when taking out a student loan. Sen. Bill Cassidy (R-LA) correctly described Biden’s initial plan exactly what it is – debt responsibility transfer – saying, “President Biden’s answer was to enact his $400 billion student debt scheme, which doesn’t forgive debt. It really transfers the responsibility to pay it back away from the person who willingly took on the debt.”

Student loan debt in the U.S. currently totals roughly $1.8 trillion, and Joe Biden’s and the Democrats’ answer to it is to create an entire generation who will take no responsibility for the loans they took out and merely pass them on to those who didn’t go to college and didn’t take out the loans. What else will they think they can dodge responsibility for? As an older student who graduated in 2022, I am now faced with paying those loans back. And for as much as the government breaks deals it makes with the American people, almost on a daily basis, I have no intention of asking others to pick up the tab I incurred for my education. I took the loan out, I will pay it back. America’s students don’t need to learn how to dodge responsibility, they need to learn that after graduation, it’s time to man up.

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