Biden’s $39B Student Debt Relief Program: What We Know

The Biden Administration Announces Automatic Student Loan Debt Forgiveness

The Biden administration’s Department of Education made a groundbreaking announcement on Friday. They will automatically forgive $39 billion of student loan debt for over 804,000 borrowers. This comes after a recent Supreme Court ruling that blocked the administration’s plan to grant forgiveness to nearly 40 million Americans.

The Department of Education will begin notifying borrowers today that their federal student loans “will be automatically discharged in the coming weeks,” according to a department news release.

Today, the Department of Education has started notifying 804,000 student loan borrowers that they will have $39 billion in Federal student loans automatically discharged in the coming weeks. https://t.co/WXbrXxiSTZ

Read more pic.twitter.com/KhnYh7ObAg

— U.S. Department of Education (@usedgov) July 14, 2023

This decision by the Supreme Court in June stated that the Biden administration cannot use executive power to cancel student loan debt. However, Education Secretary Miguel Cardona expressed his commitment to righting the wrongs of a broken system.

“For far too long, borrowers fell through the cracks of a broken system that failed to keep accurate track of their progress towards forgiveness,” Cardona said in a statement. “Today, the Biden-Harris Administration is taking another historic step to right these wrongs and announcing $39 billion in debt relief for another 804,000 borrowers.”

We have started informing eligible borrowers that they automatically qualify for forgiveness without further action on their part. Discharges will begin 30 days after emails are sent. Borrowers will be notified by their servicer after their debt is discharged.

— U.S. Department of Education (@usedgov) July 14, 2023

The Education Department had previously announced plans to bypass the Supreme Court ruling by utilizing the Higher Education Act and expanding income-driven repayment plans. These plans would reduce payments for those earning $32,800 or less annually to $0.

Furthermore, borrowers who missed their loan payments within the first year, starting from October 1, will not face penalties, default, or credit reporting.

The Department of Education estimates that this plan will save student loan borrowers at least $1,000 per year. However, the expansion of income-driven repayment plans is projected to cost taxpayers more than a one-time forgiveness program, according to the Penn Wharton Budget Model as reported in The Wall Street Journal.

“At the start of this Administration, millions of borrowers had earned loan forgiveness but never received it. That’s unacceptable,” said James Kvaal, education undersecretary. “Today we are holding up the bargain we offered borrowers who have completed decades of repayment.”

The Supreme Court’s decision in June involved two cases, Biden v. Nebraska and Department of Education v. Brown, which questioned the emergency authority of the secretary of education to cancel student loan debt.

Republican North Carolina Representative Virginia Foxx criticized the Biden administration’s actions, stating, “The Biden administration’s blatantly political attempt to circumvent the Supreme Court is shameful. Biden’s student loan scam is far from over.”

Today the Biden admin announced that it will provide billions in blanket loan “forgiveness” to over 800,000 borrowers. Once again, this admin is breaking the law to push forward its free college agenda.

Read @virginiafoxx‘s full statement:

“The Biden administration’s blatantly… pic.twitter.com/UtddAIzfiB

— House Committee on Education & the Workforce (@EdWorkforceCmte) July 14, 2023

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