President Biden announced Friday that $7.4 billion in student loan debt would be canceled for roughly 277,000 borrowers through a program that Republican-led states are already challenging in courts.
It’s the latest in a series of election-year moves to wipe out student debt, an issue with broad appeal to younger voters who are abandoning Mr. Biden in droves.
The majority of borrowers who would receive debt forgiveness in the latest round of cancellations are enrolled in the administration’s SAVE plan or participate in income-driven repayment plans. Others would qualify for loan forgiveness because they have public service jobs such as teachers, nurses and firefighters.
SAVE, which stands for Saving on a Valuable Education, is separate from Mr. Biden’s latest student loan forgiveness proposals that he unveiled Monday to automatically cancel student debt for millions of borrowers.
Since it launched last year, nearly 8 million borrowers have enrolled in SAVE and nearly 153,000 people have seen their debt canceled through their participation, totaling $1.2 billion in debt relief, according to White House data.
The $7.4 billion of new student loan debt cancellation is in addition to the $153 billion Mr. Biden has already forgiven. Earlier this week, Mr. Biden proposed a new plan that could cancel up to $20,000 interest for more than 30 million borrowers, but the White House has not revealed a final price tag for his latest proposal.
On Tuesday, two separate groups of GOP state attorneys general sued Mr. Biden over SAVE, saying he again overstepped his authority to cancel student debt.
Some of the states, including Missouri, are among those that successfully sued the Biden administration over its sweeping student loan plan, which was ruled unconstitutional by the U.S. Supreme Court last year.
In the lawsuit, the attorney generals accuse Mr. Biden of “unilaterally trying to impose an extraordinarily expensive and controversial policy that he could not get through Congress.”
“This latest attempt to sidestep the Constitution is only the most recent instance in a long but troubling pattern of the President relying on innocuous language from decades-old statutes to impose drastic, costly policy changes on the American people without their consent,” they said.
A senior White House official told reporters Thursday that the lawsuit was nothing more than “a political attack … without merit and law.”
“This lawsuit is another attack by Republican attorney generals who want to deny millions of their own constituents access to affordable repayment plans,” the official said.
Another official said borrowers who received debt forgiveness through SAVE shouldn’t worry about the chance that their debt won’t be reinstated if the GOP lawsuit is successful.
“We believe very strongly in our legal authority here,” the official said.
Before SAVE, the federal government had several income-driven loan repayment plans that linked monthly payments to a borrower’s income and family size. However, Mr. Biden’s plan offers more generous terms, especially for low-income borrowers. Some borrowers will see their monthly payments slashed in half when the plan is fully operational in July.
Mr. Biden’s plan also offers borrowers an opportunity for more forgiveness if they make monthly payments for a certain number of years under SAVE. While other government programs offer that option, the time to debt relief is shorter under SAVE.
Studies of SAVE estimate the cost to taxpayers ranges from $138 billion to $475 billion over 10 years. In comparison, Mr. Biden’s first student loan forgiveness program was expected to cost about $400 billion.
The lawsuit will take some time to wind through the courts. Before a judge can rule on the merits of the case, they must decide whether the states have standing to bring legal challenges. The states must show that they have incurred a legal injury required to bring the lawsuit.
• Jeff Mordock can be reached at jmordock@washingtontimes.com.