Student Loans

Biden’s $7.7 Billion Student Debt Handout: Taxpayers Foot the Bill

EDITOR'S NOTES

The Biden administration just handed out another $7.7 billion in student loan forgiveness to over 160,000 borrowers, adding to a total of $167 billion in debt relief for nearly 5 million Americans. While this may sound like a win for borrowers, it’s the taxpayers who are left to cover the cost. These billions aren’t just numbers on a page—they’re real dollars coming out of your pocket. With the federal budget already stretched thin, this massive debt cancellation puts a heavy financial burden on everyday Americans, forcing them to subsidize this costly policy.

The Biden administration on Wednesday morning announced another massive round of student debt handouts with $7.7 billion going toward clearing debt for more than 160,000 borrowers. 

Three categories of borrowers are covered in the latest handout: people receiving Public Service Loan Forgiveness (PSLF), people signed up for President Biden’s Saving on a Valuable Education (SAVE) Plan who are also eligible for its shortened time-to-forgiveness benefit and people receiving forgiveness on income-driven repayment (IDR) as a result of fixes made by the administration.

It includes $5.2 billion for 66,900 borrowers through fixes to PSLF, $613 million for 54,300 borrowers through the SAVE Plan that will go to borrowers enrolled in the SAVE Plan who had smaller loans for their postsecondary studies and $1.9 billion for 39,200 borrowers through administrative adjustments to IDR payment counts, the Department of Education (DOE) said in a press release.

President Biden speaks alongside Education Secretary Cardona
The Biden administration announced another $7.7 billion is going toward more than 160,000 borrowers in the latest round of student loan debt handouts. (Getty Images / Getty Images)
 

As of Wednesday’s announcement, the Biden administration has cleared $167 billion in student loan debt for 4.75 million Americans, the DOE said.

“The Biden-Harris Administration remains persistent about our efforts to bring student debt relief to millions more across the country, and this announcement proves it,” Secretary of Education Miguel Cardona said in the release. “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.”

The DOE also announced an update on the timing of the payment count adjustment, saying that the fix ensures borrowers receive credit for progress they made toward IDR forgiveness and PSLF. Borrowers now have until June 30 to apply to consolidate.

“Another 160,000 borrowers and their families will get some much-needed relief thanks to the continued efforts [of] the Biden-Harris Administration to fix the broken student loan system,” Under Secretary of Education James Kvaal said. “We congratulate those borrowers on their due forgiveness and we will continue to work to deliver relief to others.”

Education Secretary Miguel Cardona
The Biden administration has now approved $167 billion in student debt handouts for 4.75 million Americans, the DOE, led by Education Secretary Miguel Cardona, said. ( Williams/CQ-Roll Call, Inc via Getty Images / Getty Images)
 

The Biden administration has taken several actions to clear student debt, including securing a $900 increase to the maximum Pell Grant and finalizing new rules to protect borrowers from “career programs that leave graduates with unaffordable debts or insufficient earnings.”

“Today’s announcement comes on top of the significant progress we’ve made for students and borrowers over the past three years,” Biden said in a statement. “That includes providing the largest increases to the maximum Pell Grant in over a decade; fixing Public Service Loan Forgiveness so teachers, nurses, police officers, and other public service workers get the relief they are entitled to under the law; and holding colleges accountable for taking advantage of students and families. And last month, I laid out my Administration’s new plans that would cancel student debt for more than 30 million Americans when combined with everything we’ve done so far.”

“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,” he continued. “I will never stop working to cancel student debt — no matter how many times Republican elected officials try to stop us.”

President Joe Biden
President Biden said he will “never stop working to cancel student debt” when announcing his latest round of handouts on Wednesday. (Andrew Caballero-Reynolds/AFP via Getty Images / Getty Images)
 

In addition to the loans cleared under IDR, the SAVE Plan and PSLF, the Biden administration has also approved $28.7 billion for more than 1.6 million borrowers who were “cheated by their schools, saw their institutions precipitously close, or are covered by related court settlements” and $14.1 billion for more than 548,000 borrowers with a total and permanent disability.

Last year, the Supreme Court ruled that the Biden administration overstepped its authority in 2022 when it announced it would cancel up to $400 billion in student loans.

President Biden has since made new efforts to wipe out student debt, but Republican states have filed lawsuits challenging those initiatives.

This article originally appeared on Fox Business

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