The Biden administration is transferring another $7.7 billion in student debt to taxpayers, the latest installment in President Biden’s campaign to use executive power to make good on a campaign promise that was thwarted by the courts.
Biden on Wednesday announced he will be erasing $7.7 billion in student debt for 160,000 Americans under the Saving on a Valuable Education (SAVE) plan and other methods adopted by the White House.
“From day one of my Administration, I promised to fight to ensure higher education is a ticket to the middle class, not a barrier to opportunity. I will never stop working to cancel student debt – no matter how many times Republican elected officials try to stop us,” Biden said.
With its latest round of debt forgiveness, the White House estimates 4.75 million borrowers have received student-debt relief at an average of $35,000 per borrower.
“One out of every 10 federal student loan borrowers approved for debt relief means one out of every 10 borrowers now has financial breathing room and a burden lifted,” Education Secretary Miguel Cardona said in a statement.
The Supreme Court last year struck down Biden’s $400 billion student-debt forgiveness plan under the HEROES Act. The president immediately announced his plan to defy the highest court’s ruling by using the Higher Education Act to wipe out student loan debt.
The SAVE plan is an income-based repayment program estimated to cost $475 billion over a ten year period. Republican attorneys general are already suing the Biden administration over the legality of the plan.
Another plan being used by the Biden administration to transfer billions of student debt onto taxpayers is the Public Service Loan Forgiveness (PSLF) program, an initiative Biden’s Education Department expanded significantly. Professions such as nurses, police, teachers, and other government employees are the intended recipients of PSLF relief after ten years of employment.
The Biden administration’s latest round of forgiveness will apply to 66,900 PSLF borrowers who will receive $5.3 billion of relief. Under the SAVE plan, 54,300 borrowers will have $613 million of debt forgiveness. An additional 39,200 borrowers will get $1.9 billion of forgiveness through adjustments to their income-based repayment plans.
In total, the Biden administration’s various student debt forgiveness initiatives are estimated to cost anywhere from $870 billion to $1.4 trillion for as many as 30 million borrowers, depending on implementation. Beneficiaries of the Biden administration’s student-loan plans include those who have held student debt for over 20 years, borrowers who have experienced hardship, and people who attended low-value programs.
Biden’s unilateral actions on student debt will play well with younger voters Democrats are counting on this election cycle, some of whom have turned against Biden because of his support for Israel’s war effort against Hamas.