Biden cancels $7.7 billion in student loans for 160,000 borrowers in latest debt forgiveness

President Biden announced on Wednesday that his administration will cancel $7.7 billion of student loans for 160,00 borrowers.

The latest of a series in the election year to eliminate student debt is a topic that appeals to millennials who have abandoned Mr. Biden by the thousands.

The White House announced that the latest round is aimed at borrowers enrolled into the Saving on a Valuable Education repayment plan (SAVE), as well as income-driven repayment plans or Public Service Loan forgiveness plans.

The Biden administration has implemented SAVE, an income-driven repayment program to help cancel smaller student loan amounts more quickly.

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In his latest move, Biden has cancelled $167 billion in loans for 4,75 million borrowers.

“I promised from the first day of my Administration that I would fight to ensure that higher education was a ticket into the middle class and not a barrier for opportunity. “I will never stop fighting to cancel student loans, no matter how many Republican elected officials attempt to stop us,” said Mr. Biden in a press release.

Last month, Biden cancelled $7.4 billion worth of loans to 277,000 people through SAVE. This program is being challenged in court by Republican-led states.

In April, several groups of GOP attorneys general sued Mr. Biden for SAVE. They claimed that he had again exceeded his authority in cancelling student debt.

Missouri is one of those states that sued the Biden Administration over its student loan program, which the U.S. Supreme Court ruled was unconstitutional last year.

In the lawsuit the Attorney Generals accuse Mr. Biden “of unilaterally trying to impose a controversial and extraordinarily costly policy that he couldn’t get through Congress.”

They said that “this latest attempt to sidestep Constitution is just the most recent example in a long, but troubling pattern where the President relies on innocuous words from decades-old laws to impose radical and costly policy changes to the American people without consent.”

Last month, a senior White House official said to reporters that the lawsuit was “nothing more than a political attack… without merit or law.”

The official stated that “this lawsuit is yet another attack from Republican Attorney Generals who want millions of their constituents to be denied access to affordable repayment options.”

A second official stated that borrowers who have received debt forgiveness via SAVE should not worry about their debt being reinstated in the event the GOP lawsuit succeeds.

The official stated, “We are very confident in our legal authority.”

Before SAVE was introduced, the federal government offered several income-driven repayment plans. These plans tied monthly payments to the borrower’s family size and income.

But Mr. Biden’s plan is more generous, particularly for low-income borrowers. When the plan becomes fully operational in July, some borrowers’ monthly payments will be halved.

Under Mr. Biden’s plan, borrowers can also receive a larger amount of forgiveness if they pay monthly for a specified number of years. Other government programs also offer this option, but SAVE offers a quicker timeframe for debt relief.

SAVE’s studies estimate that taxpayers will pay between $138 billion and $475 billion in costs over a period of 10 years. The first program of Mr. Biden to forgive student loans was estimated to cost $400 billion.

It will take time for the lawsuit to make its way through the court system. Judges must first decide if the states have the right to challenge the law. The states have to show they’ve suffered the type of injury that is required for them to file a lawsuit.