President Joe Biden visited Madison, Wisconsin, on April 8 to announce his administration’s latest attempt to forgive tens of millions of dollars of debt in student loans.
He also announced a plan to “deliver up to $20,000 in interest relief to over 20 million borrowers and full forgiveness for millions more.”
“Today, I’m proud to announce five major actions to continue to relieve student debt for more than 30 million Americans,” he told a cheering crowd.
That interest relief would be up to $20,000 of the amount the borrower’s balance has grown to because of unpaid interest, regardless of income, so long as the borrower has already entered a repayment process, according to the White House.
Qualified borrowers who are enrolled in an income-driven repayment plan such as Saving on a Valuable Education (SAVE) or Public Service Loan Forgiveness and who make $120,000 per year or less (or $240,000 per year or less for those who are married) would be eligible for the entire amount that their balances have grown to because of interest. The White House said that nearly 8 million people are already enrolled in the SAVE plan, which is set to go into full effect on July 1.
The Biden administration also seeks to cancel the student debt load for borrowers who began their repayment process 20 years ago and for those who are facing hardships in everyday life and are enrolled in low-financial-value programs.
“Today, too many Americans, especially young people, are saddled with unsustainable debts in exchange for a college degree. The ability for working and middle-class folks to repay their student loans has become so burdensome [that] a lot can’t repay for even decades after being in school.”
According to the plan, this loan forgiveness would add to the $146 billion of student debt relief already approved by the Biden administration for 4 million Americans through more than 12 executive actions over his current term.
The original loan forgiveness plan that aimed to cancel $430 billion in repayments for 43 million Americans was struck down by the Supreme Court in a 6–3 decision in June 2022.
The complaint filed on March 28 states: “A coalition of States sues Defendant Biden, as well as co-defendants the Department of Education and Secretary of Education Miguel Cordona, to stop a second attempt to avoid Congress and pass an illegal student debt forgiveness.”
Republican National Committee Chairman Michael Whatley released a statement on April 8 denouncing the administration’s actions, which he called the president’s “Bankrupting America Tour.”
“Biden wants to use your tax dollars to buy votes because more and more young people are supporting President Trump,“ Mr. Whatley said. ”Here’s the truth: Biden’s student loan bailout for the wealthy was already struck down by the Supreme Court, and his policies are driving historic inflation while crushing industries like manufacturing and agriculture. Wisconsinites can’t afford Bidenomics—we need to elect President Trump to get our economy back on track.”
Yet the Biden administration remains undeterred in its goals.
“We know that Republican officials obviously in the past have done everything that they can to oppose the president’s efforts to give Americans—millions of Americans—a little breathing room,” White House press secretary Karine Jean-Pierre told reporters traveling with the president to Wisconsin. “So, while we can’t prevent them from filing lawsuits against this plan, the president will never stop fighting on behalf of borrowers, no matter how many times Republicans try to stop them.”
The Biden administration’s plan also looks to cancel loans associated with institutions and programs that are no longer eligible to participate in the federal student aid program or “were denied recertification because they cheated or took advantage of students.”
The administration also seeks to provide relief for borrowers who attended an institution that closed and “failed to provide sufficient value.” That includes graduates who left facing “unaffordable loan payments” or who earn “no better than what someone with a high school diploma earns.”
“We’re committed to holding colleges accountable when they leave students with mountains of debt, and without good job prospects,” Ms. Jean-Pierre said. “That’s our commitment. And so we'll be issuing proposed rules on the policies announced today in the coming months.”
Looking ahead to a possible second term, President Biden said that his next goal was to try to make community college free.
