Biden’s Department of Education to cancel $39B in student loans

President Biden’s Department of Education announced Friday it would cancel $39 billion in federal student loans for more than 800,000 borrowers within the next month.

In a statement, Education Secretary Miguel Cardona called the move a “historic step,” but Republicans were livid.

“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.

“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.”

“By fixing past administrative failures, we are ensuring everyone gets the forgiveness they deserve, just as we have done for public servants, students who were cheated by their colleges, and borrowers with permanent disabilities, including veterans,” Cardona added about the new plan.

“This Administration will not stop fighting to level the playing field in higher education.”

Republicans criticized the Biden administration for “fixing” the loan forgiveness plan just weeks after the Supreme Court overturned an earlier Education Department scheme to cancel $400 billion in student debt.

“The Biden administration’s blatantly political attempt to circumvent the Supreme Court is shameful,” Rep. Virginia Foxx (R-NC), who chairs the House Education and Labor Committee, said in a statement. “The Biden administration is trampling the rule of law, hurting borrowers, and abusing taxpayers to chase headlines.”

“This president is dead set on ruining our postsecondary education financing system for a few votes next November, taxpayers and the rule of law be damned,” she added.

The Education Department touted past approvals for more than $116.6 billion in federal debt cancellation for more than 3.4 million students when announcing the new initiative.

The plan forgives borrowers who have already racked up 240 or 300 monthly loan payments, making good on Biden’s 2020 campaign pledge to forgive student debt.

On June 30, Biden asked Cardona to forgive other loans via that law, known as the Higher Education Act of 1965, and floated payment deferrals for other student borrowers based on income.

“Today we are holding up the bargain we offered borrowers who have completed decades of repayment,” said Education Under Secretary James Kvaal.

The Supreme Court’s 6-3 decision had prompted the president to consider alternatives for discharging the federal loans.

The plan relied on a 2003 law designed to aid veterans of the Iraq and Afghanistan wars in the wake of the national emergency caused by the conflicts.

The Biden administration argued financial constraints caused by the COVID-19 pandemic constituted such an emergency, despite having ended the nation’s emergency declaration on April 11.