During a speech in Las Vegas on Sunday, President Joe Biden boasted that he has continued canceling student debt thanks to workarounds in defiance of a U.S. Supreme Court ruling that blocked his debt relief plan—while claiming that the forgiveness won’t burden taxpayers.
“I promised we’d help eliminate accumulated student debt that millions of Americans carried during the economic pandemic and beyond,” President Biden said in the speech, recalling one of his key campaign promises.
“The Supreme Court of the United States blocked me, but they didn’t stop me,” he continued, saying he “found another way” to continue canceling student debt, while falsely claiming that the various forgiveness schemes were “not costing people” anything.
In a 6-3 decision in the summer of 2023, the Supreme Court blocked President Biden’s plan to cancel $430 billion in student loan debt for some 43 million Americans, protecting taxpayers from having to fund the forgiveness scheme but delivering a blow to one of the president’s campaign promises.
At the time, President Biden denounced the decision, saying in a June 30, 2023, speech at the White House that the Supreme Court decision “closed one path” but that his administration would “pursue another,” including by way of a student debt forbearance scheme under the Higher Education Act.
Since then, the Biden administration has continued to cancel debt for specific groups of federal student loan borrowers by tweaking and expanding rules under existing relief programs.
For example, in his Las Vegas speech, President Biden said he “fixed” one of the existing programs to allow public servants to get student debt relief, adding that members of this group would be getting notices in the mail soon.
“This time, they’re not going to have any doubt about who sent it to you. It’s going to have my name on it—Biden,” he declared.
‘Not Costing People’?
In late January, the U.S. Department of Education canceled another $5 billion in federal student loan debt owed by some 73,600 borrowers, bringing the total that the Biden administration has so far approved for cancellation to a whopping $136 billion for some 3.7 million people.
In his Nevada speech, the president said he’s determined to keep at it.
“I mean it,” he said. “We’ve got another $25 billion a year” in the pipeline, the president continued, claiming incredibly that the student debt forgiveness not only “grows the economy” but it’s “not costing people” anything.
Clips of President Biden’s remarks have circulated online, drawing various reactions, many critical.
“It is getting paid for by those of us who repaid our own college loans,” one X user stated. “Criminal.”
The Republican National Committee’s (RNC) research arm took to X to say that President Biden’s claim that his student debt cancellation scheme isn’t costing people anything is false.
“He’s wrong. That debt gets transferred to Americans who didn’t go to college through inflation and taxes,” the RNC Research account wrote.
Numerous critics of President Biden’s student loan forgiveness scheme have panned the debt wipeout as unfair to people who sacrificed to pay off their student loans or never racked them up in the first place—but now are being forced to foot the bill for other people’s debts.
Debt Forgiveness Costs
In August 2022, the Biden administration unveiled its plan to forgive up to $20,000 in student debt per person for about 40 million borrowers.
At the time, the White House said that the cancellation scheme would cost $24 billion per year, or $240 billion over a 10-year period.
By contrast, projections by the Penn Wharton Budget Model and the Committee for a Responsible Federal Budget put the figure at between $330 billion and $500 billion over the decade, respectively.
Under that sweeping plan, taxpayers would have absorbed up to $10,000 in outstanding student debt for individual borrowers earning less than $125,000 per year or $250,000 for married joint filers.
At the time, Senate Republican Leader Mitch McConnell (R-Ky.) called President Biden’s student loan cancellation scheme “socialism” and a “slap in the face of every family who sacrificed to save for college, every graduate who paid their debt, and every American who chose a certain career path or volunteered to serve in our Armed Forces to avoid taking on debt.”
The Supreme Court’s 6-3 decision in June 2023 put an end to that scheme—but the president has, as he made clear in his Las Vegas speech—continued to cancel student debt by every means at his disposal.
Some political strategists have said that the president’s various debt forgiveness actions could help him as he runs for re-election, even if they’re blocked by the courts because it would generate anger that could be channeled to fuel voter engagement.
Republican nominees for president have voiced opposition to the Biden administration’s student debt forgiveness.
President Trump, who is the frontrunner for the Republican 2024 nomination, said after the Supreme Court ruling that the debt cancellation “would have been very unfair to the millions and millions of people who paid their debt through hard work and diligence—very unfair.”
Nikki Haley, former U.S. ambassador to the United Nations who’s polling in second place, has said canceling student debt is unfair for those who worked hard to pay back their loans or make other career choices that didn’t involve going deep into debt.
via zerohedge
