According to data released on Oct. 4 by the Department of Education, nearly 3.6 million Americans across the country have had $127 billion in debt forgiven in student loan debt since President Joe Biden took office in 2021. This debt relief for thousands has occurred despite ongoing opposition from congressional Republicans and a Supreme Court ruling against the administration’s plans for debt forgiveness.
The debt was forgiven via fixes to the Department of Education’s income-driven repayment plans and Public Service Loan Forgiveness Program. Borrowers with total and permanent disabilities have had their debts forgiven. The administration has also forgiven loans for students who were defrauded by for-profit colleges or who were students of schools that prematurely shut down.
“Today’s announcement builds on everything our administration has already done to protect students from unaffordable debt, make repayment more affordable, and ensure that investments in higher education pay off for students and working families,” Secretary of Education Miguel Cardona said in a statement.
In August of last year, Biden announced more expansive plans for student loan relief that would have canceled or reduced financial obligations for up to 43 million people.
In remarks delivered on Aug. 25, 2022, at the White House, Biden described relief as a key component of his overall economic philosophy of assisting middle class families.
“I ran for office to grow the economy from the bottom up and the middle out because when we do that, everyone does better, everybody does well,” Biden said. “The wealthy do very well, the poor have a way up, and the middle class can have breathing room.”
In June 2023, however, the conservative majority on the Supreme Court in a 6-3 decision blocked the Biden administration from implementing the debt forgiveness plan.
Biden expressed disappointment in the decision in a statement released June 30.
“I believe that the Court’s decision to strike down our student debt relief plan is wrong. But I will stop at nothing to find other ways to deliver relief to hard-working middle-class families,” he said.
Democrats have supported debt forgiveness and called for it in the party’s 2020 presidential platform. Republicans have opposed government action to help people struggling with student debt.
Then-House Minority Leader Kevin McCarthy cast doubt on Biden’s actions in a tweet on the same day the initial plans for debt relief were announced.
“Who will be forced to pay for Biden’s debt transfer scam? Hard-working Americans who already paid off their debts or never took on student loan debt in the first place,” McCarthy wrote.
A Penn Wharton Budget Model analysis released in August 2022 found that the benefits of Biden’s proposed plan would have gone mainly to families in the working and middle class. The study determined that 75% of the benefits would go to households that earned less than $88,000 per year.
Published with permission of The American Independent Foundation.