This comes nearly a year after the Supreme Court thwarted previous attempts to implement similar measures.
According to a White House press release, the new proposal seeks to forgive the student loan debt of over four million Americans, erase a minimum of $5,000 in debt for more than 10 million borrowers, and completely eliminate accrued interest for 23 million borrowers. This initiative follows the Supreme Court's 6-3 decision in June 2023, which blocked the Biden administration's plan to grant student loan forgiveness to nearly 40 million Americans using executive power.
The White House press release stated, "While Republican elected officials try every which way to block millions of their own constituents from receiving student debt cancellation, President Biden has vowed to use every tool available to cancel student debt for as many borrowers as possible, as quickly as possible." This statement likely alludes to the Supreme Court's June 2023 ruling.
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President Biden is scheduled to travel to Madison, Wisconsin, to discuss these plans. The administration claims that it has already relieved four million Americans of at least $146 billion in student debt through a series of executive actions.
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The president's latest plan includes a provision for low-and-middle-income Americans enrolled in an "income-driven repayment plan" to have their interest forgiven. The plan also extends forgiveness to several other categories of American borrowers, including those who attended a "low-financial-value" institution.
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Elaine Parker, president of Job Creators Network Foundation, criticized the plan, stating, "The Biden administration is lawlessly ignoring the Supreme Court and Congress by launching another massive student loan bailout program. The Supreme Court ruled last year that mass student loan cancellation is unconstitutional, but Biden has made it clear that he won’t respect this decision. He is acting as a King, not a president."
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In February 2023, Biden announced his Saving on a Valuable Education (SAVE) repayment plan. A year later, he canceled the student debt of 153,000 Americans, totaling $1.2 billion.
Following the Supreme Court's decision on the president's student loan action, Biden announced a new plan in August 2022 to cancel up to $10,000 in student loan debt for non-Pell Grant recipients and up to $20,000 for Pell Grant recipients using the 2003 HEROES Act. This legislation empowers the Education Secretary to "waive or modify" provisions of student financial assistance programs during a national emergency to ensure recipients are "not placed in a worse position financially."
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The press release further stated, "The Administration’s plan for student debt relief will also include a plan that would cancel student debt for borrowers experiencing hardship in their daily lives that prevents them from fully paying back their loans now or in the future."
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