It’s an election year for Joe Biden and he’s trotting out another student loan bribery program, just like he did in 2022 ahead of the midterm elections.
With a price tag of $1.2 billion, this program is different but it still has the net effect of cancelling student loans.
Here’s more on this from Politico:
President Joe Biden on Wednesday will announce $1.2 billion of student debt relief for nearly 153,000 borrowers — and he’s sending emails to make sure they know whom to thank for it.
The administration’s latest tranche of loan forgiveness covers borrowers who are enrolled in Biden’s new loan repayment program, initially borrowed $12,000 or less and have been repaying their debt for at least 10 years.
The administration says that it has now approved loan discharges totaling nearly $138 billion for nearly 3.9 million borrowers through dozens of administrative actions since coming into office.
But a challenge for the Biden reelection campaign and Democratic allies is making sure that the president gets credit for canceling that debt—even as the White House explores ways to further increase the number of Americans receiving loan relief.
“Congratulations—all or a portion of your federal student loans will be forgiven because you qualify for early loan forgiveness under my Administration’s SAVE Plan,” says the email message from Biden that the Education Department plans to send on Wednesday to the latest group of borrowers receiving loan forgiveness.
“I hope this relief gives you a little more breathing room,” Biden writes in the message.
So how does Biden’s new bribery program work? Instead of waiting for over 20 years of repayment to get loan forgiveness, Biden’s new program does it in 10 years.
Thanks to the Supreme Court’s ruling in 2022 Biden just can’t unilaterally forgive loans outright. So he’s changing federal rules on loan repayment without congressional approval.
The latest tranche of loan forgiveness is part of Biden’s new loan repayment program — known as the SAVE plan — that the administration finalized last year. It offers lower monthly payments based on borrowers’ income and an easier path to getting their debts ultimately canceled after years of payments.
Previously, borrowers under federal income-driven repayment programs would have to make payments for 20 or 25 years before having their remaining balances forgiven.
But Biden’s SAVE plan reduces that timeline for many borrowers. The Education Department announced earlier this year it would implement that benefit automatically for borrowers about six months ahead of schedule.
Under the plan, borrowers who originally borrowed $12,000 or less start receiving a discharge of their remaining balance after making 10 years of payments. That amount of time increases by one year for each additional $1,000 borrowed. For example, borrowers who initially borrowed $13,000 would need to repay for 11 years before receiving forgiveness, for example.
Borrowers must be enrolled in the SAVE plan to receive that relief. The Education Department said it planned to reach out to borrowers they’ve identified who would be eligible for loan forgiveness immediately if they sign up for the SAVE program.
The department said that about 7.5 million borrowers are currently enrolled in the SAVE plan. About 4.3 million of those borrowers have income that is low enough to quality them for a $0 monthly payment.
Unfortunately the Senate refused to follow the House’s lead in stopping this program so it stands for now. I’m sure someone will challenge it in court because, at the end of the day, it’s still loan forgiveness and it is still being done without Congress.