President Joe Biden on Wednesday expanded his efforts to eliminate student loan debt, saying in a speech that the initiative was part of a campaign promise to address the “broken” system.
“While a college degree is still a ticket to a better life, that ticket is too expensive,” Biden said. “And too many Americans still have to take on unsustainable debt in exchange for a college degree.”
Biden made the remarks during a trip to California where he also raised funds for his 2024 campaign. He argued that forgiving student loan debt helps not only those who receive the benefits directly, but also those in their communities.
“When people get their student debt forgiven, they buy homes, start businesses, make contributions, engage in the community in ways they couldn’t before, and that actually promotes economic growth,” Biden said.
The latest round of student debt forgiveness includes nearly 153,000 borrowers and a total of $1.2 billion in debt, according to a data sheet from the White House.
Those who receive debt relief are enrolled in the Saving on a Valuable Education (SAVE) repayment plan, have been repaying their loans for at least 10 years, and had originally taken out loans of less than $12,000.
This week’s actions bring the Biden administration’s total student loan forgiveness for nearly 3.9 million people to $138 billion, the fact sheet said.
Repayments depend on income and family size
The so-called SAVE plan allows borrowers to determine their student loan repayment based on their income and the size of their family, rather than the amount of their student loan debt.
“The SAVE plan ensures that borrowers who make their monthly payments cannot increase their debt because of unpaid interest,” a White House fact sheet says. “And starting in July, student loan payments will be cut in half, capping a borrower’s payments at 5% of their disposable income.”
Education Minister Miguel Cardona said in a phone call with reporters on Tuesday that about 7.5 million people are enrolled in the SAVE plan and 4.3 million do not have a monthly payment.
“Many recipients of SAVE debt relief come from low- and middle-income families,” Cardona said. “Many took out loans to attend community colleges. Some were at high risk of delinquency and default. That’s why the actions we’re announcing today are important.”
Cardona said those eligible for this round of student loan forgiveness will receive an email from Biden informing them of the move.
Criticism of modern FAFSA rollout
Louisiana Republican Senator Bill Cassidy called the latest round of student loan forgiveness wrong.
“The Biden Department of Education has failed to fulfill its basic responsibilities mandated by Congress and important to families, such as implementing the FAFSA program,” Cassidy said, referring to the application that college students must fill out to receive student aid such as grants, scholarships and loans.
The Biden administration’s efforts to revise the form were marred by delays and errors.
“Instead, they have spent a lot of time prioritizing their student loan programs to shift the debt of others onto taxpayers who chose not to go to college or who have already paid off their loans,” Cassidy added. “This is unfair, manipulative and a cynical attempt to buy votes.”
Cassidy is the ranking member of the U.S. Senate Health, Education, Labor, and Pensions Committee, often referred to as the HELP Committee.
Decision of the Supreme Court
In his speech at the Julian Dixon Library in Culver City, California, Biden criticized the U.S. Supreme Court for Blocking his original plan to have his student loan forgiven.
“Earlier in my administration, I announced a comprehensive plan to provide student debt relief for millions of working families,” Biden said. “But my Republican friends from the MAGA movement in Congress, elected officials and special interests stepped in and sued us. And the Supreme Court blocked the plan. But that didn’t stop me.”
Biden said the judges’ opinion in the case prompted him to pursue “alternative paths” to student debt relief, including the announcement he made Wednesday.
By forgiving some student loan debt, people will be given a chance, Biden said.
“That’s all we’re doing… we’re giving people a chance, a real chance to make it, because no one in America who is willing to work hard should be denied the opportunity to have that chance.”
