Biden Announces $39B Student Loan Forgiveness

Facts

• US Pres. Joe Biden's administration announced Friday that it would automatically forgive $39B in student debt for 804K borrowers.¹
• The debt forgiveness comes after the government reportedly fixed the student loan system's income-driven repayment plans, which allowed it to cancel borrowers' residual debt after 20 or 25 years of payments, depending on when they borrowed and their loan and plan type.²
• According to the Department of Education, Friday's action addressed "administrative errors" that miscounted qualifying payments made by borrowers, which include Americans with Direct Loans or Federal Family Education Loans held by the department.¹
• This comes after SCOTUS last month struck down Biden's plan to forgive up to $20K in debt for 43M federal student loan borrowers.³
• Meanwhile, Biden said he was directing the Education Department to create a new plan for loan forgiveness based on the Higher Education Act that he said would be "legally sound."³
• In 2022, the White House estimated that federal student loans amount to about $1.6T in money owed and affect nearly 45M Americans.⁴

Sources: ¹CNN, ²CNBC, ³NBC, and ⁴Al Jazeera.

Narratives

• Democratic narrative, as provided by The Hechinger Report. For far too long, the American working class has been made collateral damage by a dysfunctional student loan system. This new and improved student loan system could provide a breather to hundreds of thousands of vulnerable and marginalized youth who have unfortunately fallen through the cracks.
• Establishment-critical narrative, as provided by Wall Street Journal. Pres. Biden's determination to forgive millions of dollars of student debt is a slap in the face to hard-working taxpayers. Despite SCOTUS ruling his previous plan unconstitutional, he's dead set on ruining the American higher education system to buy himself a few votes come next November.

Predictions