Biden Administration to Forgive $39 Billion in Debt to Fix Program

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The Biden administration has found a way around the recent Supreme Court ruling that struck down Joe Biden’s plan to reduce student debt. Biden said, “This battle is not over” after the Court ruled that the plan was unconstitutional.

The correction will wipe out the debts of 804,000 borrowers, totaling $39 billion.

Assistance will be provided in the form of modifications to the income-based repayment plan. The government will cancel any debt that remains after 20-25 years of repayment, depending on the type of loan and the original repayment plan. The administration argues that payments were not accounted for correctly, which would have helped the borrower get closer to paying off the entire debt. Miguel Cardona, Education Secretary, said that the changes were necessary because “for far too long, debtors fell through the cracks in a system that was broken and failed to accurately track their progress toward forgiveness.”

The Biden administration now counts payments made by borrowers who have paused their payments because of certain deferments or forbearances. Included are also those who have made partial or delayed payments.

Persis Yu may have revealed the future plans of the Obama administration regarding student loan forgiveness by stating:

“Make no mistake, this action is providing relief to over 804,000 people because of 804 failures, and this is just the tip of the iceberg.” “Student loan systems that are dysfunctional have made working people collateral damage.”

What is the difference between the Supreme Court’s plan and the new plan? The previous plan was based on the Heroes Act of 2002, which was passed in the wake of the 9/11 attacks. The Act gave the President broad powers to modify student loan programs in times of national emergencies. The COVID-19 Pandemic was included in the category of national emergencies. Biden, however, declared that the pandemic was over in April. The plan now is to use the Higher Education Act which gives the Secretary of Education more authority to waive or erase student loan debt.

Joe Biden is under pressure from both the left and Democrats in order to achieve some form of student loan forgiveness.

Rep. Ilhan Omar, D-MN, said that “every option must be considered.” Rep. Ayanna Pressley, D-MA, said “I’m calling on Secretary Cardona and President Biden to use the other tools at their disposal to quickly cancel student debt.” Sen. Alex Padilla, D-CA, said “While the Supreme Court shut the door on this approach, I refuse to believe there is no way forward.”

Republicans and Americans who have paid off their student loans see this as a vote-buying campaign during the election year. The GOP has proposed several pieces of legislation to ensure that potential borrowers are fully informed about the terms and conditions when they take out student loans. Bill Cassidy, R-LA, correctly described Biden’s original plan as a debt responsibility transfer, saying that “President Biden’s solution was to implement his $400 billion student loan scheme, which does not forgive the debt.” It transfers the burden of repaying the debt from the person who took it on.

The student loan debt in America is currently around $1.8 trillion. Joe Biden and the Democrats are trying to solve this problem by creating a generation that will not take responsibility for their loans and instead pass them to those who did not go to college or take out loans. What other things will they try to avoid responsibility for? Now that I’m an older student, who graduated in 2022 and am responsible for paying back those loans, it is time to pay them off. As often as the US government breaches its agreements with the American public, I do not intend to ask others to pay for the education I paid for. I borrowed the money, and I will repay it. Students in America don’t have to learn to avoid responsibility. They need to know that it’s now time to take on the world.