WASHINGTON — President Biden said Wednesday that his administration is forgiving $9 billion in student loan debt through existing programs as part of a broader push to chip away at the effects of the Supreme Court’s June ruling axing his plan to wipe away $430 billion in college debt.
“I’m announcing my administration has approved an additional $9 billion in relief for 125,000 borrowers in just the past few weeks,” Biden said at his only public event of the day at the White House.
“With the latest debt cancellation, in total, my administration has canceled $127 billion in student debts for nearly 3.6 million Americans.”
The latest $9 billion in debt relief was the result of three changes to ensure that people already eligible for loan forgiveness under existing programs actually got the money wiped from their balance sheets, the White House said.
Biden has routinely touted such steps as he courts younger voters going into next year’s election after receiving criticism for not doing more to fulfill his campaign pledges of relief — and his latest moves didn’t satisfy those critics.
Astra Taylor, co-founder of the Debt Collective group, told CNBC Wednesday that “if the Department of Education can cancel this amount, it can cancel it all — meeting and exceeding the president’s commitment to borrowers currently being crushed by the chaotic return to repayment.”
Although Republican administrations have pushed forward their own plans for student debt write-offs, some GOP critics say that forgiveness is unfair to borrowers who repaid the cost of their education and to taxpayers who opted not to attend college.
“Joe Biden’s student loan bailout for the wealthy was already struck down by the Supreme Court. Now, he is trying to save face by cancelling debt for a few while families struggle to afford Bidenomics,” Republican National Committee chairwoman Ronna Romney McDaniel said Wednesday.
“Biden’s desperate vote grabs won’t cover for sky-high inflation and failed economic policies.”
Biden announced his far more ambitious plan to forgive up to $10,000 in student debt for all borrowers — or double that amount for low-income Pell Grant recipients — in August 2022 ahead of last year’s midterm elections, despite what fellow Democrats, including then-House Speaker Nancy Pelosi (D-Calif.), acknowledged were long legal odds.
The majority of the amount from Wednesday’s announcement — $5.2 billion — goes toward 53,000 public service workers eligible for loan forgiveness under the Public Service Loan Forgiveness program, which was created in 2007 through legislation signed by President George W. Bush.
The PSLF program allows loans to be forgiven after 10 years of payments, with the effects set to have taken effect beginning in 2017. Student loan payments were suspended at the onset of the COVID-19 pandemic in 2020 and the relief program has been criticized for being poorly implemented in the meantime.
“By the time I took office [the Public Service Loan Forgiveness program] had been in place for nearly 15 years. Because of red tape, only 7,000 borrowers had been helped,” Biden said Wednesday. “Well today, thanks to reforms, more than 700,000 borrowers have had their debts forgiven.”
Another $2.8 billion in new debt relief applied to about 51,000 former college students through existing income-driven repayment plans that cap the amount of income that goes toward loan payments, the White House said.
The remaining $1.2 billion went toward roughly 22,000 eligible borrowers with total or permanent disability through cross-checking Social Security Administration data.
Biden previously announced various other efforts to address “red tape” in existing student loan repayment programs as well as forgiveness of loans for students who were victims of allegedly fraudulent educational institutions — including a $6 billion debt cancellation in June for about 200,000 former students of largely for-profit schools.