June 13, 2024
Loans

Biden announces another $5B in student loan forgiveness after Supreme Court defeat



WASHINGTON — President Biden said Friday his administration is forgiving another $5 billion in student loan debt for 74,000 people using existing government programs — continuing his piecemeal approach to write-offs after the Supreme Court last year struck down his sweeping plan to forgive $430 billion in college debt.

The latest action brings Biden’s post-ruling loan forgiveness to about $137 billion, according to a Wall Street Journal tally — as the 81-year-old president tries to demonstrate that he’s making good on a campaign pledge as he seeks a second term in this year’s election.

“I wanted to forgive all student debt and the Supreme Court said, ‘No,’ I didn’t have the authority to do that,” Biden said during a White House speech to mayors Friday afternoon — exaggerating the scale of his prior plan, which would have forgiven either $10,000 or $20,000 per borrower.

“Then I realized there was a public service requirement out there,” the president recounted — referring to existing loan forgiveness laws passed with bipartisan support.

Action to forgive student debt was “fair” and “grows the economy,” Biden argued, as beneficiaries can “go out and go buy a home, invest in a business… [and] grow their families.”

He also noted that interest on student debts can eclipse the principal on federally backed-loans.

“The interest you’re paying is in fact more than the original bill was,” Biden alleged.

Unlike the plan struck down by the Supreme Court in June, the latest actions lean on the implementation of laws passed by prior administrations.

The latest beneficiaries include 44,000 teachers, nurses, firefighters and others who qualify for the reprieve after working for 10 years in careers defined as public service under a 2007 law signed by Republican President George W. Bush.

President Biden announced additional student loan relief. AP

Another 30,000 people are having their debt forgiven because they were entered for 20 years into income-driven repayment plans that cap expenses as a percentage of earnings, according to the White House.

Income-driven repayment programs have been supported by both Republican and Democratic administrations.

“I won’t back down from using every tool at our disposal to get student loan borrowers the relief they need to reach their dreams,” the president said in a statement.

But the moves to reduce the federal balance sheets has drawn Republican criticism.

“President Biden is downright desperate to buy votes before the election — so much so that he greenlights the Department of Education to dump even more kerosene on an already raging student debt fire,” House Education Committee Chairwoman Virginia Foxx (R-NC) told Fox News last week.

Biden’s earlier nixed forgiveness plan was decried by critics as a political stunt because it was announced shortly before the 2022 midterm elections in response to an activist campaign after fellow Democrats, including then-House Speaker Nancy Pelosi (D-Calif.), said it wouldn’t be legal for him to wipe away student debt with the stroke of a pen.

Another $5 billion will be forgiven. Shutterstock

Republican critics of Biden’s focus on loan forgiveness have called for action to stem the growth of college expenses as a way to reduce debt burden.

After leaving office as vice president, Biden was paid about $1 million to serve as a professor at the University of Pennsylvania from 2017 to 2019, despite making just nine known campus visits and not actually leading any classes.

In 2021, Biden picked Penn president Amy Gutmann, who had also provided him with a DC office where misplaced classified documents were later found, to be US ambassador to Germany.





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