President Joe Biden announced plans on Monday to either fully or partially cancel the student debt of more than 30 million borrowers.
This cancellation comes less than a year after the U.S. Supreme Court voted 6-3 that the Biden administration overstepped its authority by attempting to cancel student debt, as reported by SCOTUSblog.
Biden openly criticized the Supreme Court’s move, claiming it was a “mistake” and the “wrong” decision. However, according to CNBC, Biden chose to move forward with plans to cancel student debt regardless.
This new plan is expected to cancel the debt of people who have been paying off their debt for over 20 years, qualify for forgiveness under an income-driven repayment plan, are currently experiencing hardship, or carry “runaway interest,” according to a statement from The White House.
The plan would “cancel up to $20,000 of the amount a borrower’s balance has grown due to unpaid interest on their loans after entering repayment, regardless of their income.”
“Under [the Saving on a Valuable Education plan], borrowers who originally took out $12,000 or less in loans and have been in repayment for 10 years are eligible to get their remaining debt canceled,” the statement reads.
Borrowers who have been in repayment for more than 20 years will also be eligible to have all of their student debt canceled.
Additionally, student debt will be canceled for those who used the taxpayer-backed loans to enroll in “low-financial-value programs” or higher-education institutions that are no longer eligible to participate in the Federal Student Aid Program.
Biden told reporters that the plan was meant to help the younger generation of borrowers, explaining that “too many Americans, especially young people, are saddled with too much debt.”
“While a college degree still is a ticket to the middle class, that ticket is becoming much too expensive,” Biden added, per The New York Times.
Although Biden has continually expressed his support for the cancellation of student debt, many have noted that taxpayers will ultimately have to foot the bill and that the high price tag of debt cancellation would hinder the federal government’s ability to handle its massive deficit.
“There are trade-offs, and it’s quite likely that if we spend this money on forgiving student loan debt, we won’t spend it on other things we want to see the government do,” Sandy Baum, a nonresident senior fellow at the Urban Institute, explained in 2022, according to Forbes.
Since taking office in 2021, the Biden administration has spent more than $146 billion on student debt cancellation, though it remains unclear what could have been done with the funding.