On Monday, Secretary of Education Miguel Cardona reinforced the Education Department’s commitment to provide relief for student loan borrowers. This announcement followed the Supreme Court’s rejection of a governmental plan to forgive millions of student loans.
Cardona said, “The goal is to be able to pay what you can afford. Right now, people are falling into default because the college loan payments are too high for the salaries.” He continued, “Clearly, we’re not done fighting for the borrowers. We’re not done fighting for accessible higher education, and that’s something we’re going to be committed to.”
Cardona: The supreme court ‘got it wrong’
Despite Cardona’s belief that the Supreme Court “got it wrong,” he assured future decisions about student loan forgiveness would comply with the Court’s ruling.
This ruling, a 6-3 decision on June 30, rejected the federal administration’s proposal to forgive $20,000 in debt for around 40 million borrowers, a move which would cost the government over $800 billion.
Cardona criticizes court’s ruling, introduces affordable repayment plan
Cardona criticized the court for ruling “against students and families across the country” post-judgment. Simultaneously, the Education Department unveiled an income-driven repayment plan dubbed Saving on a Valuable Education (SAVE).
Cardona deemed it the “most affordable repayment plan in history.”
Biden administration announces $39 billion loan forgiveness plan
The Biden administration, seeking alternative paths for debt relief, later revealed a $39 billion plan to forgive the loans of 804,000 borrowers who’ve made repayments for 20 to 25 years.
Critiques suggest this plan heavily burdens the economy, with journalist Eric Spracklen posting, “President Joe Biden just granted over $39,000,000,000 in student loan forgiveness to 800,000 borrowers. America’s national debt is over $32,500,000,000,000+. This is insanity.”
The projected cost of the SAVE Scheme is disputed, with estimates ranging from $138 billion (Education Department) to $230 billion (Congressional Budget Office) and $471 billion (Foundation for Government Accountability).
Biden admin advances student loan forgiveness amidst controversy
The Biden administration has already approved over $116.6 billion in student loan forgiveness, benefiting over 3.4 million borrowers.
President Biden, announcing the $39 billion forgiveness plan, blamed the GOP for indifference to the hardships of everyday Americans.
Despite objections, some political experts suggest the loan forgiveness program will serve Biden’s presidential campaign by painting the GOP negatively due to their opposition to the plan.
Biden admin’s loan forgiveness plan triggers debate
A political scientist, John Pitney, believes, “If Biden wins, he gets their gratitude for winning. If he loses, he still gets credit for fighting.”
Jay Townsend, a political consultant, echoed this sentiment, calling the situation a “win-win” for Biden.
The loan forgiveness plan incites a debate over the policy’s economics and fairness.
Loan forgiveness plan triggers mixed reactions
While Rep. Katie Porter (D-Calif.) views it as “excellent news” for the U.S. economy, others like Paul Kamenar, lead counsel for the National Legal and Policy Center, see it as unfair to students who repaid their loans and burden taxpayers.
Rep. Lisa McClain (R-Mich.) criticized the “unconstitutional” loan forgiveness scheme on Twitter as a “slap in the face to hard-working taxpayers.”
She vowed, “Come hell or high water, I will fight this blatant overreach until the end.”