Biden’s $9 Billion Student Debt Relief Plan, Explained
During the first week of October, news of President Joe Biden’s new student loan debt relief became breaking news. The announcement meant that over $9 billion in debt was wiped off the records.
But many people remain puzzled about who will benefit from this relief and to what extent. If you are among these confused students and ex-students, your answers are right here.
What's With Joe Biden and Debt Relief?
For people who are aware that debt relief has been a trending topic under the Biden administration, the first question in their mind is “Why?” Conservatives, who are strongly opposed to the plan, have been asking the same question.
The most agreeable answer is that student loan debt forgiveness was a top campaign promise of the president. It is widely believed that the president wants to leave a legacy through the policy.
"A Ticket to the Middle Class"
Speaking on the intention behind the debt forgiveness, the White House said in a statement, “President Biden has long believed that college should be a ticket to the middle class, not a burden that weighs on families.”
The statement also referred to the student loan system as “broken” and restated the Biden administration’s resolve to “fix the broken student loan system, make college more affordable, and bring the promise of higher education in reach for more Americans.”
Who Benefits From the $9 Billion Relief?
The new relief will favor about 125,000 Americans who the government is convinced are in serious need of forgiveness. This includes borrowers in three categories.
First, public servants who have been in public service at the federal, state, and local government levels for ten years or more. 53,000 of such workers will benefit from $5 billion of the total relief.
Biden Fixed the Public Service Loan Forgiveness Program
Normally, tens of thousands of public servants and nonprofit workers who met certain requirements were eligible for federal student loan debt forgiveness under the Public Service Loan Forgiveness Program. But only a few thousand in this category have been granted relief.
The purpose of Biden’s announcement was to ensure that every eligible public servant benefited from the program.
A Category of 51,000 Beneficiaries
Also to benefit from the bailout is a category of 51,000 people who have been offsetting their undergraduate loan for 20 years or more. This category was eligible for some debt relief, which for some reason, they didn’t receive.
The Department of Education says it has fixed this lapse by correcting “historical inaccuracies in the count of payments that qualify toward forgiveness.” This category of persons will share $2.8 billion of the new relief.
Something for People With Disabilities
The rest of the money, about $1.2 billion, will go to 22,000 people who are living with a disability. These disabilities could be either total or partial disability.
The government will identify and screen for eligible beneficiaries who have been identified for discharge through, in the words of the White House statement on the relief, “a data match with the Social Security Administration.”
The Supreme Court Blocked the Initial Debt Relief Plan
This isn’t the Biden administration’s first move to ease student loan debt burdens. The earliest and most liberal attempt, which was worth $430 billion, couldn’t pass through Supreme Court scrutiny.
Republicans had argued that the initial plan was dictatorial and in breach of the Constitution. This new debt relief which was achieved by “fixes” to the debt forgiveness systems is, however, likely to succeed.
$127 Billion Debt Relief Approved so Far
This additional $9 billion will bring the total debt relief approval by the Biden administration to $127 billion. Total beneficiaries now total 3.6 million.
Of this number of beneficiaries, people living with a total or permanent disability amounted to 513,000. This group has benefited $11.7 billion so far from the debt forgiveness policies. Also, nearly $51 billion went to 715,000 public servants.
The White House has also announced that so far, $42 billion has gone to relieve debt burdens for 855,000 borrowers “who are eligible for forgiveness through income-driven repayment by fixing historical inaccuracies in the count of payments that qualify toward forgiveness.”
$22.5 billion has gone to over 1.3 million people who were tricked by their schools with false student job claims, whose schools suddenly closed down, or are “covered by related court settlements.”
Why Are Republicans Against the Loan Forgiveness Plan?
Republican politicians who have fumed over the legality of the plans have argued that President Biden’s executive order approvals have usurped the powers of the legislature only empowered by the Constitution to grant such forgiveness.
They have also questioned its fairness as borrowers who paid up their loans will not benefit from the financial assistance and will bear the burdens of the others.
Conservatives Aren't Giving Up the Struggle
Conservative senators and house members have continued to fight the Biden administration’s moves which will also cut down monthly repayments for some borrowers to zero under Biden’s Saving on Valuable Education (SAVE). These legislators continue to explore the possibilities of crushing Biden’s moves on the floor of the Senate and the House.
According to Sen. Ted Cruz (R-Texas), “This administration’s policy is to blue-collar collar workers and American families across the country to pay off the cost of a Washington bureaucrat’s college degree – it’s morally bankrupt.”