The Biden administration is withdrawing a plan to potentially provide more than $250 billion of student debt relief on the same day it announced $4.5 billion of debt cancellation for public sector employees.
The Department of Education withdrew an assortment of proposed rules Friday to unilaterally deliver more than $250 billion of student debt relief under the Higher Education Act of 1965, a plan that was put in place after the Supreme Court prevented the White House from wiping out $400 billion of student debt under a different law.
“The Department has repeatedly attempted to cancel student loans unlawfully for years, with courts halting each of these schemes. We are happy to see that the Department has finally learned its lesson and is withdrawing these two latest unlawful loan-cancellation plans,” said the New Civil Liberties Alliance, a right-leaning legal group involved with the fight against the Education Department’s rules.
The Education Department’s proposals were split up into a $150 billion relief package with several different relief proposals, and another $112 billion “hardship” cancellation package based on a list of qualifications the White House devised.
President-elect Donald Trump’s Education Department is expected to put an end to the Biden administration’s efforts to transfer billions worth student debt obligations onto taxpayers despite various legal setbacks. State GOP attorneys general have been on the forefront of fighting the Education Department’s attempt to forgive student debt in federal courts across multiple jurisdictions.
Republicans widely consider student debt forgiveness to be a bailout for highly educated progressives with taxpayer funds from middle and working class Americans. Democrats believe the student loan system to be unjust and in some cases predatory when borrowers accumulate enormous debt obligations.
Some progressives have criticized the Biden administration for not moving quickly enough to forgive student debt and proposing the $400 billion cancellation under the HEROES Act, a 2003 law granting the Education Department the power to relieve student debt in national emergency situations.
On Friday, the Biden administration said it will be using a loan forgiveness plan for public employees to transfer $4.28 billion more of student debt onto taxpayers, bringing its total assistance to over $180 billion for 4.9 million borrowers.
“Because of our actions, millions of people across the country now have the breathing room to start businesses, save for retirement, and pursue life plans they had to put on hold because of the burden of student loan debt,” Biden said in a statement.
The White House’s $475 billion income-based repayment initiative, the Saving on a Valuable Education plan, was responsible for $56.5 billion of the promised relief during Biden’s term.