Biden Administration Announces Plan to Transfer Student Debt for Tens of Millions of Americans onto Taxpayers

The Biden administration announced on Monday its latest scheme to transfer student debt from tens of millions of Americans to taxpayers over the coming months.

President Biden’s student-debt plans would forgive student debt for 4 million Americans and eliminate accrued interest for 23 millions borrowers, the White House said Monday. An additional 10 million borrowers would receive student debt relief of $5,000 or more.

If the proposed plan is finalized, borrowers would be forgiven of up to $20,000 in accrued interest on their loans regardless of income. For low-and-middle income borrowers on an income-driven repayment plan, the Biden administration seeks to cancel the full amount their balance has increased since they began student debt repayment.

“With yet another student loan bail out announced, Biden continues to make clear his policy priorities: Sell out hardworking taxpayers so he can win back support from young Americans in an election year,” Sentinel Action Fund president Jessica Anderson told National Review.

“Not only is he willing to shift debt to financially responsible Americans so he can win in November, but he is also willing to bypass Congress and ignore the Supreme Court in order to do it.”

Additionally, the Biden administration plans on relieving student debt for all borrowers eligible for repayment plans such as the Saving on a Valuable Education (SAVE) plan and the Public Service Loan Forgiveness (PSLF) program. The Department of Education will identify eligible borrowers and forgive their student debt even if they have not applied for the student debt assistance. Roughly 2 million borrowers will have their student debt forgiven under this new policy.

SAVE is an income-based repayment plan created by the Biden administration in August estimated to cost $475 billion over ten years. A group of Republican attorneys general are suing the White House over the legality of the SAVE plan and they estimate SAVE will wipe out at least $156 billion of student loan debt.

The PSLF is a previously existing debt-relief option designed to forgive student loan debt for borrowers with ten years of public service work and 120 months of student-debt payments. In late March, the Biden administration used PSLF to wipe out nearly $6 billion of student loan debt for 78,000 public service employees.

“Forgiving student debt only gives colleges a blank check to keep on raising tuition at more than twice the inflation rate, knowing that taxpayers will pick up the tab. This does nothing to address the college debt crisis and will only saddle future generations with even more debt in the years to come. It is nothing more than a vote-buying exercise heading into election season,” Jobs Creators Network Foundation president Elaine Parker said in a statement provided to NR.

Borrowers who began repaying student debt over 20 years ago, those who attended low-value education programs, and people experiencing hardship are also set to benefit from the Biden administration’s debt relief plan. The Biden administration’s announcement does not include cost estimates for each section of its student loan debt forgiveness scheme.

Overall, the Biden administration has used executive actions to shift $146 billion of student debt held by four million borrowers onto taxpayers. President Biden’s student debt forgiveness policy is based on the White House’s interpretation of the Higher Education Act, a law the administration said it would use immediately after the Supreme Court ruled last year the executive branch could not wipe out student debt under the HEROES Act.