Govt Fails to Manage Student Loan Forgiveness?

It’s election season, and President Biden has been promoting every conceivable debt forgiveness headline his administration has generated.

When the Supreme Court of the United States (SCOTUS) struck down the current administration’s plan to cancel $10,000 to $20,000 in federal student debt per qualifying borrower in 2023, many people thought the dream of student loan forgiveness had come to an end.

For example, the Biden-Harris Administration said they have granted the following types and amounts of forgiveness by March 2024:

  • 930,500 borrowers had their $45.6 billion in student loan debt released due to changes to income-driven repayment arrangements.
  • $22.5 billion in forgiveness for more than 1.3 million borrowers who were “cheated by their schools, saw their institutions precipitously close, or are covered by related court settlements”
  • $11.7 billion in loan forgiveness for nearly 513,000 borrowers with total and permanent disabilities.
  • 29,700 borrowers have had $1.7 billion in federal loans canceled due to administrative modifications to IDR payment counts.

The administration also announced up to $6 billion in new debt forgiveness for 78,000 public employees, after previously claiming to have forgiven student debt for nearly 870,000 public employees. That comes after over $1.2 billion in student debt cancellations were approved for roughly 153,000 borrowers repaying loans through the Saving On a Valuable Education (SAVE) income-driven repayment program.

Future Loan Forgiveness Plans

While these figures are encouraging for borrowers seeking student loan forgiveness, it is crucial to highlight that nearly all of the cancelled debt is the consequence of President Biden’s actions on existing loan forgiveness programs. One could argue that the President is simply carrying out his duties as the “executive” of the Executive Branch – executing established initiatives.

However, some of this loan forgiveness is the direct outcome of the Biden administration, such as the SAVE program. He is also doing more.

According to the U.S. Department of Education, these payment count adjustments will eventually assist 3.6 million William D. Ford Federal Direct Loan (Direct Loan) Program borrowers in accumulating at least three years of credit toward loan forgiveness, or potentially having all of their loans forgiven automatically.

While some of the forgiveness under this scheme has already occurred, “more borrowers will receive additional time credit toward federal student loan forgiveness,” he stated.

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