Biden Administration’s Startling Move With Student Loan Debt Leaves Thousands Astonished

(LibertySons.org) – The Supreme Court struck down President Joe Biden’s plan for student debt cancellation under the HEROES Act with their recent decision in Biden v Nebraska. Responding almost immediately to the Court’s ruling, the Biden administration began implementing rule changes ahead of the October 1 date when borrowers must start making payments on deferred loans again. However, one move concerning student debt will likely leave thousands astonished.

The Department of Education’s implementation of income-driven repayment (IDR) plans using revised payment count adjustment rules announced in 2022 could result in the discharge of 804,000 loans issued to borrowers totaling around $39 billion. Under the new rules, borrowers who have accumulated either 240 or 300 months (20 or 25 years) of payment credits would become eligible for debt forgiveness, depending on when they first initiated their loans and the types of loans. The rule change affected how the government counted those months.

Education Secretary Miguel Cardona announced the agency would notify the borrowers who qualify for loan discharge. He credited the Biden administration with correcting long-standing deficiencies in the system that inaccurately accounted for borrowers’ progress toward loan forgiveness.

In a statement on Friday, July 14, President Biden quoted himself saying, “College should be a ticket to the middle class — not a burden that weighs [heavy] on families for decades.” He noted that while this move represented a repair of past failures, the administration didn’t intend to stop with this action. He mentioned how new income-driven repayment plans could cut monthly payments in half for some undergraduate loans.

Vice President Kamala Harris also issued a statement on Friday highlighting the administration’s commitment to helping Americans obtain relief from student loan debt. She noted her experience as California’s former attorney general in winning a $1 billion settlement for defrauded veterans and students from predatory for-profit colleges.

Friday’s action builds on other Biden administration programs that have provided relief for Public Service Loan Forgiveness, forgiveness for borrowers who have experienced total and permanent disability, and borrowers cheated by unscrupulous schools, schools that closed, or schools covered in related court settlements. Forgiveness for those categories extended to almost 2.5 million borrowers, totaling $77.5 billion.

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