The Supreme Court put a roadblock in front of President Joe Biden‘s student loan forgiveness plans, but it has not stopped them.
Biden announced a massive student debt transfer totaling at least $400 billion in August 2022, only to see it struck down by the high court in June 2023. But since then, it has been full steam ahead for the Biden administration and its Education Department, with so many student debt actions taken over the last six months that it’s hard even for experts to keep up with it all.
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While the moves generate excitement and hope for the roughly 40 million people with student debt, they have upset people concerned that the unpaid debt falls on the backs of taxpayers, not to mention the less-than-sound financial advice implied at the individual level.
“If you take out a loan, you pay it back,” Sen. Tim Scott (R-SC) was fond of saying during his now-suspended presidential campaign.
Here are three times Biden forgave student loan debt despite the Supreme Court’s ruling.
July 14: $39 billion
Just two weeks after the Supreme Court ruling, the administration announced that 804,000 borrowers would have $39 billion of their student debt transferred to the public debt. The Department of Education described the move as a fix to income-driven repayment plans, by which partial, late, and deferred payments were counted toward the completion of the program.
“For far too long, borrowers fell through the cracks of a broken system that failed to keep accurate track of their progress towards forgiveness,” Education Secretary Miguel Cardona said in a written statement.
This and other moves were made despite the Supreme Court ruling because they rest on a different legal authority.
Namely, the $400 billion original program rested legally on the HEROES Act of 2003, written with Iraq War veterans in mind and dependent on the presence of a national emergency, whereas the cancellation since has rested on the Higher Education Act of 1965.
Lawsuits have been filed claiming these moves are similarly illegal, and Congress is getting involved, though nothing has been successful yet at stopping them.
Oct. 4: $9 billion
The Biden administration announced another student debt transfer, this time in the amount of $9 billion, on Oct. 9.
This one affected 125,000 borrowers and was also described as making “fixes” to income-driven repayment and Public Service Loan Forgiveness programs, along with “automatic relief” for borrowers with disabilities.
“Today’s announcement brings the total approved debt cancellation by the Biden-Harris Administration to $127 billion for nearly 3.6 million Americans,” read a release from the Department of Education.
Dec. 6: $4.8 billion
Biden announced another $4.8 billion, again under the Public Service Loan Forgiveness program, that the administration says would transfer debt held by 53,000 people.
Once again, it was described as consisting of fixes to income-driven repayment plans, this time for people who have held student debt for 20 years or more but who have not paid it off. Another $1.2 billion was for people with disabilities.
“It’s because of actions my administration took to make sure that borrowers who have been in repayment for at least 20 years — but didn’t accurately get credit for student loan payments — get the relief they are entitled to,” Biden said in a release. “This brings the total debt cancellation my administration has approved to $132 billion for over 3.6 million Americans through various actions.”
Biden described it as an “alternative path” to canceling student loans, while Cardona added, “We have no intention of slowing down.”
2024: More to come
The president has teased more cancellations next year, with Biden’s Education Department announcing the week that loan repayments began after a 3 1/2-year pause that it would consider adding regulations under which more loans could be forgiven.
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Those new programs will reportedly focus on four groups: debtors whose balances are greater than what they originally borrowed, those with loans that were taken out decades ago, those whose college experience “did not provide sufficient financial value,” and those who are eligible for relief programs but have not applied.
A fifth group, “those who are experiencing financial hardship that the current student loan system does not currently adequately address,” could be added later.
