Biden Unveils $39 Billion Student Loan Forgiveness Plan

President Joe Biden announced a new plan to forgive billions in outstanding student loans this week, following a high-profile defeat by the Supreme Court last month. The new $39 billion program is far smaller than his original $430 billion plan struck down by the high court.

The new White House plan will affect about 800,000 current student loan payers. 

Secretary of Education Miguel Cardona compared the effort to previous forgiveness programs for veterans and the disabled. 

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

The Department of Education said that some borrowers who pay under income-driven repayment (IDR) plans would be “eligible for forgiveness if they have accumulated the equivalent of either 20 or 25 years of qualifying months.”

Sen. Eric Schmitt (R-MO) questioned the constitutionality of the revised plan.

Schmitt filed the lawsuit challenging the Biden administration’s first plan during his tenure as Missouri’s attorney general. 

The Missouri Republican wrote that the Department of Education had previously determined that the agency’s secretary “does not have the authority” to carry out such loan forgiveness programs.

“The Court determined student debt cancellation is expressly a decision for the Article I branch, not for un-elected bureaucrats in the Article II branch,” he wrote.

The senator referenced his successful lawsuit against the initial Biden administration program, which he called “schemes that simply further an unfair bailout.” 

He said that the most recent Biden White House initiative “will likely fail” due to the separation of powers and that “the executive branch simply does not have the authority to wipe away billions of dollars of debt.”

The original Biden administration’s plan would have forgiven either $10,000 or $20,000 for certain student loan recipients prior to the Supreme Court’s decision. 

Chief Justice John Roberts wrote in the court’s majority opinion that such forgiveness plans were up to Congress, not to executive fiat. 

Roberts wrote that the Department of Education’s attempted changes “created a novel and fundamentally different loan forgiveness program.”

“The Secretary’s comprehensive debt cancelation plan cannot fairly be called a waiver — it not only nullifies existing provisions, but augments and expands them dramatically,” the justice wrote.