‘I won’t back down’: Biden cancels loan debt for 6.9M students in SCOTUS work-around

President Joe Biden vowed that he “won’t back down” from the Supreme Court and, despite a SCOTUS smackdown, announced he will cancel the loan debt of millions of American students beginning in February.

In August, Biden launched the “Saving on a Valuable Education” (SAVE) plan, touted by the White House as “the most affordable repayment plan ever created.”

According to a Friday statement from the president, “Already, 6.9 million borrowers are enrolled in the plan, and 3.9 million have a $0 monthly payment.”

“I am proud that my Administration is implementing one of the most impactful provisions of the SAVE plan nearly six months ahead of schedule,” Biden announced. “Starting next month, borrowers enrolled in SAVE who took out less than $12,000 in loans and have been in repayment for 10 years will get their remaining student debt cancelled immediately.”

“This action will particularly help community college borrowers, low-income borrowers, and those struggling to repay their loans,” he explained. “And, it’s part of our ongoing efforts to act as quickly as possible to give more borrowers breathing room so they can get out from under the burden of student loan debt, move on with their lives and pursue their dreams.”

“I encourage all borrowers who may be eligible for early debt cancellation to sign up for the SAVE plan at studentaid.gov,” he added.

“Officials did not announce the exact number of people who will be affected by the cancellation effort, or the dollar amount that will be forgiven,” the Daily Mail reports.

According to the White House in August, “The Biden-Harris Administration estimates that over 20 million borrowers could benefit from the SAVE plan.”

“Borrowers with undergraduate loans will have their payments reduced from 10% to 5% of their discretionary income. Those who have undergraduate and graduate loans will pay a weighted average between 5% and 10% of their income based upon the original principal balances of their loans,” it explained.

The White House detailed the “early forgiveness” portion of the plan in August:

IDR [ income-driven repayment] plans require all borrowers, even those who only attended school for a single term, to repay their loans for at least 20 or 25 years before receiving forgiveness of any outstanding balance.

Under the SAVE plan, borrowers whose original principal balances were $12,000 or less will receive forgiveness after 120 payments (the equivalent of 10 years in repayment). For each additional $1,000 borrowed above that level, the plan adds an additional 12 payments (equivalent of 1 year of payments) for up to a maximum of 20 or 25 years.

For example, if a borrower’s original principal balance is $14,000, they will see forgiveness after 12 years. Payments made previously (before 2024) and those made going forward will count toward these maximum forgiveness timeframes.

 

“Today’s announcement builds on all we’ve been able to achieve for students and student loan borrowers in the past few years,” Biden said in Friday’s statement. “This includes: fixing the Public Service Loan Forgiveness program so that borrowers who go into public service get the debt relief they’re entitled to under the law; achieving the largest increases in Pell Grants in over a decade to help families who earn less than roughly $60,000 a year; and holding colleges accountable for leaving students with unaffordable debts.”

“And, in the wake of the Supreme Court’s decision on our student debt relief plan, we are continuing to pursue an alternative path to deliver student debt relief to as many borrowers as possible as quickly as possible,” the president promised. “I won’t back down from using every tool at our disposal to get student loan borrowers the relief they need to reach their dreams.”

For many on X, the plan is more proof of Biden’s lawlessness.

“Nothing says ‘rule of law’ like circumventing a Supreme Court decision because you don’t like it,” noted one user. “I mean, who needs things like separation of powers, constitutional checks and balances, or respect for the judiciary when you can just ignore a court ruling and do whatever you want?”

“That’s definitely the way to uphold the rule of law and promote democracy,” the user quipped. “But hey, at least he’s trying to help students, right?”

Melissa Fine

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