Biden Admin Takes Another Run At Forgiving Student Loan Debt

Here we go again. Two weeks after the Supreme Court rejected the Biden Administration’s attempt to unilaterally forgive student loan debt, the Department of Education is trying again:

Washington Post:

The Biden administration announced Friday that it will forgive the student loans of more than 800,000 borrowers, wiping out $39 billion in debt, through “fixes” to the count of payments needed to qualify for relief.

The Education Department first announced last year that it would offer a one-time adjustment to help address any inaccuracies in payment counts for borrowers in income-driven repayment plans. The plans allow forgiveness after making a certain number of monthly payments, typically after 20 or 25 years.

“For far too long, borrowers fell through the cracks of a broken system that failed to keep accurate track of their progress toward forgiveness,” Education Secretary Miguel Cardona said in a statement Friday. “By fixing past administrative failures, we are ensuring everyone gets the forgiveness they deserve,” he said.

Friday’s announcement drew criticism from some Republicans since it comes two weeks after the Supreme Court rejected a broader plan by the Biden administration to forgive more than $400 billion in federal student loan debt. That plan would have erased up to $20,000 in federal student debt for tens of millions of borrowers meeting certain income limits. The administration argued that the Higher Education Relief Opportunities for Students Act of 2003 gave the department authority to forgive debt. But critics argued that the plan burdened taxpayers with other peoples’ unpaid debt, and said the effort was an attempt to find loopholes in the legislation to push through sweeping changes that Congress would be unlikely to pass.

Within hours of the ruling, President Biden said he would pursue a “new path” to give borrowers relief using a different law, the Higher Education Act.

Biden had campaigned on a promise to ease student-loan debt, an issue popular with his political base, and one with added urgency now that loan payments that had been paused during the pandemic are set to resume this fall. The administration has announced other relief measures since Biden took office.

The plan announced Friday draws on the Education Secretary’s existing authority over loan repayment programs.

But critics argue the administration is going too far.

“The Biden administration’s blatantly political attempt to circumvent the Supreme Court is shameful,” Rep. Virginia Foxx (R-N.C.) said in a statement Friday. “The Biden administration is trampling the rule of law, hurting borrowers, and abusing taxpayers,” she said. “From day one, this administration has encouraged borrowers not to repay their loans and has expected taxpayers to foot the bill. Today’s celebration of counting no payments as payments is just the latest example of the ongoing delusion at the White House.”

Abby Shafroth, director of the Student Loan Borrower Assistance Project, said Friday’s announcement has no relation to the Supreme Court case and doesn’t raise legal concerns because it’s built on long-standing congressional authority over income-driven repayment plans. “Congress created these plans that provide debt relief to people who make payments based on their income for 20 to 25 years. … What we’re seeing today are some long-needed fixes to that program so that borrowers actually get the relief of Congress intended.”

Preston Cooper, a senior fellow in higher education policy with the Foundation for Research on Equal Opportunity, said the administration has fairly broad authority under the law to set the terms of income-driven repayment plans. But he suggested that some might argue that even if technically legal, Friday’s announcement goes far beyond what Congress intended. “There might be a case against it on those grounds,” said Cooper, who opposed Biden’s original debt-relief plan.