Biden administration announces billions in student loan forgiveness

The Biden administration announced on June 14th that it would be relieving the student debt of hundreds of thousands of borrowers in the president’s latest move to counter the Supreme Court’s decision to strike down his radical student loan forgiveness plan. 

The Department of Education noted in a statement that 804,000 borrowers will see their federal student debt automatically discharged in a couple of weeks, which will amount to $39 billion in loan forgiveness for those who meet the administration's criteria. 

The reasons behind why Biden would relieve so much debt now are varied and political but one of the main motivations according to the Education Department was the historic failure in the administration of the federal student loan program and borrower payments. 

The new discharges will be a result of “fixes” to the system which should have brought some borrowers closer to forgiveness but weren’t being properly tracked by the people managing the federal student loans program’s income-driven repayment plans. 

Borrowers are eligible for forgiveness if they’ve accumulated the equivalent of 20 or 25 years of qualifying monthly payments according to the statement from The Department of Education and the agency will soon have a better idea of who actually qualifies. 

“For far too long, borrowers fell through the cracks of a broken system that failed to keep accurate track of their progress towards forgiveness,” Education Secretary Miguel Cardona said in a written statement from the Department of Education. 

“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. 

It’s all very complicated but really boils down to a set of changes being made that will look at and address the discrepancy payments that have been made by borrowers but not counted toward the amount needed to earn debt forgiveness from the federal program. 

Borrowers are eligible for federal student debt forgiveness only after they’ve made 240 or 300 monthly payments but inaccurate payment counts resulted in some borrowers not having a proper count of the number of payments made against their loans. 

“At the start of this Administration, millions of borrowers had earned loan forgiveness but never received it. That’s unacceptable,” said Under Secretary James Kvaal.

"Today we are holding up the bargain we offered borrowers who have completed decades of repayment.”  the Under Secretary added. 

Borrowers will be notified if they’re eligible to have their student debt forgiven and the discharge of debts will begin 30 days after a borrower has been notified of their debt’s forgiveness by the government according to the Department of Education.

Joe Biden’s administration has forgiven $116.6 billion in student loan debt for over 3.4 million Americans since he took office but the fight to help the country’s indebtedness hasn’t been easy. Republicans have been fighting tooth and nail to stop Biden’s assistance. 

“Some are even objecting to the actions we announced today,” Biden said in defense of his move to forgive more student debt, “which follows through on relief borrowers were promised, but never given, even when they had been making payments for decades.”

The move comes just one month after the Supreme Court struck down Biden’s plan to discharge upwards of $20,000 in student debt for millions of Americans according to a CNN report. Biden promised at the time that he wouldn’t stop fighting for debt relief. 

“I’m never going to stop fighting for you. We’ll use every tool at our disposal to get you the student debt relief you need and reach your dreams. It’s good for the economy. It’s good for the country,” Biden said at the White House last month according to CNN.

It looks as if Biden has kept that promise and is working hard to find ways within the Executive Branch’s power to ensure that those who deserve student debt relief get it. How this will play out is still yet to be seen but hopefully, it's the first move of many.