President Joe Biden has announced he is renewing his administration’s debt-cancellation efforts after the US Supreme Court rejected his last initiative.
President Biden had previously attempted to exploit the HEROES act to execute his loan forgiveness plan.
However, in Biden v Nebraska, the Supreme Court ruled President Biden’s loan forgiveness plan was unconstitutional.
Biden’s new plan will circumvent the Supreme Court’s ruling by crafting debt-cancellation as a proposed rule via the US Department of Education’s rule-making process.
According to the White House, debt relief will encompass over 30 million Americans once implemented.
Accumulated interest for millions of borrowers, regardless of income level, potentially up to $20,000 of interest per borrower, will be canceled.
Additionally, debt from eligible borrowers who have been hindered by bureaucratic hurdles in accessing relief programs such as the SAVE plan and Public Service Loan Forgiveness will also be forgiven.
Progressives have welcomed Biden’s debt-cancellation plan.
“This new round of student loan debt forgiveness from @POTUS will be a game-changer for countless working-class people,” said Representative Alejandro Frost (D-FL).
Conversely, conservatives have qualified Biden’s student loan forgiveness as a brazen, irresponsible action intended to harvest votes during an election season.
“Biden is using your tax dollars to buy votes. It’s unfair & illegal,” said US Senator Rick Scott (R-FL).
The Committee for a Responsible Federal Budget (CRFB), a nonpartisan, non-profit organization researching and educating the public on fiscal policy issues, disagreed with Biden’s plan.
CRFB President Maya MacGuineas claimed Biden’s plan “misses the mark.”
“This new plan will cost tens of billions of dollars at a time when we should be working to reduce the debt, and by worsening inflationary pressures it’s likely to lead the Fed to keep interest rates higher for longer,” said President MacGuineas.
According to MacGuineas, over $600 billion have already been spent on debt cancellation, which is more than ten times the annual cost of the Federal government’s K-12 education expenses.
Biden’s proposed debt-cancellation plan will enter into force in the coming months absent any procedural roadblocks.
