Biden Thinks He Found a Student Loan Loophole
Despite suffering a decisive defeat at the Supreme Court last year, the Biden administration is making a second attempt at sweeping, automatic student loan forgiveness. These new efforts are less ambitious than the previous attempt but still might cost taxpayers billions if enacted.
Student loan forgiveness has long been key to President Joe Biden’s education policy. In August 2022, the Education Department unveiled a plan for broad loan forgiveness, seeking to discharge up to $20,000 in federal student loans for individual borrowers earning less than $125,000 and couples earning less than $250,000 annually.
The cost of one-time forgiveness was estimated at $360 billion and was quickly challenged in court. The Supreme Court formally blocked the plan in June 2023, ruling it was an unconstitutional exercise of spending authority.
The Court slapping his hand hasn’t stopped Biden. The Education Department’s 2022 proposal included major changes to the federal student loan program. Most notably, it created a much more generous income-driven repayment (IDR) plan, allowing borrowers to gain forgiveness more quickly and pay back significantly less of their loans (though this has also been halted in federal court).
These and other changes have already contributed an estimated $145 billion increase to the 2024 federal budget deficit. But that wasn’t enough. In April, Biden announced another major effort to forgive federal student loans.
“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,” reads an April White House press release. “President Biden from Day One has worked to fix the student loan system and make sure higher education is a ticket to the middle class.”
Despite those grand pronouncements,
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