Biden Disobeys SCOTUS Ruling

Gage Skidmore from Surprise, AZ, United States of America, CC BY-SA 2.0 , via Wikimedia Commons

On Friday, the U.S. Education Department revealed that it would soon start informing over 804,000 debtors about the automatic discharge of their collective $39 billion in Federal student loans in the ensuing weeks.

Education Secretary Miguel Cardona expressed his concern about borrowers who, until now, had been neglected by an inefficient system that overlooked their progression towards loan forgiveness. Today, he said, the Biden-Harris administration is rectifying these mistakes by providing $39 billion in debt cancellation for an additional 804,000 debtors.

Cardona emphasized that the current administration is addressing past bureaucratic oversights to ensure all debtors receive their due forgiveness. This action is in line with the administration’s previous efforts to help public servants, students defrauded by their colleges, and borrowers with permanent disabilities, including veterans. The Secretary stated that their fight to equalize opportunities in higher education would persist.

The Education Department clarified that the forthcoming loan discharges were a consequence of corrections made by the Biden-Harris administration to give borrowers an accurate tally of the monthly payments that are eligible for forgiveness under income-driven repayment (IDR) plans.

The Department is dedicated to correcting past mismanagement of the Federal student loan program, where qualifying payments made under IDR plans, which should have propelled borrowers towards forgiveness, were not appropriately recorded. Borrowers can become eligible for forgiveness if they’ve made the equivalent of 20 or 25 years of qualifying monthly payments.

The Education Department plans to identify and inform borrowers who meet the relevant forgiveness thresholds (240 or 300 qualifying monthly payments, depending on their repayment plan and loan type) bi-monthly until next year, when all borrowers who are not yet eligible for forgiveness will have their payment counts updated.

Vice President Kamala Harris affirmed that she and President Biden are resolute about providing relief to student loan debtors, enabling them to progress in life, whether their plans include starting a family, purchasing a house, or becoming a business owner. She further asserted that their commitment extends beyond this effort, citing a recent announcement by President Biden about an alternative relief path through the Higher Education Act and a new income-driven repayment plan that halves the monthly payments for undergraduate loans.

This development follows a Supreme Court ruling two weeks ago that disallowed the Biden administration’s student loan debt relief program. By a 6-3 decision, the court determined that the education secretary does not have the legal authority to forgive more than $430 billion in student loan debt. This ruling was in response to a proposed plan by the Secretary that would have wiped out nearly $430 billion in federal student loan balances.

In the wake of the court’s decision, Biden assured that he would continue to seek other avenues to offer relief to middle-class families struggling with debt.

Biden’s student loan plan, which had been paused due to legal proceedings, proposed that the federal government provide up to $10,000 in debt relief, and up to $20,000 for Pell Grant recipients, for individuals earning less than $125,000 annually. This plan was projected to cost the government over $400 billion.