Biden launches second major effort to wipe out as much as $20,000 in student debt for 30 million borrowers after Supreme Court blocked first attempt

The Biden administration has unveiled its latest effort to forgive millions in student loans, which the White House believes would bring relief to as many as 30 million borrowers.

The effort comes after President Biden’s first plan for widespread student debt forgiveness was blocked by the Supreme Court last year.

After the original plan was rejected, the Biden administration began looking for other ways to forgive debt through the regulatory process. Monday’s new proposals are the result of those efforts.

The new plans would cancel up to $20,000 in unpaid interest for borrowers who currently owe more on their loans than they originally borrowed.

The abolition of interest would have consequences single borrowers making $120,000 or less and married borrowers making $240,000 or less, and would be implemented automatically without requiring borrowers to apply.

The plans would also forgive the debts of two million borrowers who would have qualified for other forgiveness programs but have not yet applied.

In addition, undergraduate borrowers who started repaying 20 years or more ago, graduate students who started repaying 25 years or more ago, borrowers enrolled in programs with low financial value and who have had financial difficulty repaying of loans, also see relief.

According to the Biden administration, the plans would completely eliminate accrued interest for 23 million borrowers, forgive the full amount of student debt for more than four million borrowers, and provide more than 10 million borrowers with at least $5,000 or more in debt relief.

The government will release the plans in the coming months, followed by a public comment period. Senior government officials said the goal is to begin delivering aid this fall.

“President Biden will use every tool available to cancel the debt of as many borrowers as possible, no matter how many times Republican elected officials try to stand in his way,” White House Press Secretary Karine Jean-Pierre said in a call to reporters.

Government officials spread out across the country on Monday to promote the latest efforts. President Biden will explain the new plans on Monday during a visit to Madison, Wisconsin.

Education Secretary Miguel Cardona will also promote the new proposals during a visit to New York, Vice President Harris will travel to Philadelphia and Second Gentleman Doug Emhoff will highlight the efforts in Phoenix, Arizona.

Last June, the Supreme Court blocked the president’s original $400 billion plan to forgive up to $20,000 in student debt for millions of borrowers making less than $125,000 a year.

But the Biden administration said they were not done with their fight to provide relief to millions of borrowers.

Senior administration officials said they have carefully reviewed the Supreme Court’s 2023 decision and are pursuing the new regulations in a manner consistent with that decision.

The new plans are part of the regulatory process that started last summer and are being implemented under the authority of the Education Secretary in the Higher Education Act.

“This is not the same plan, and we are confident moving forward,” a senior administration official said.

Monday’s announcement for additional student loan debt forgiveness builds on other efforts the Biden administration has already made since the first plan was blocked.

To date, the Biden administration has already forgiven $146 billion in student debt for four million borrowers through changes to multiple programs, including the Income Driven Repayment Plan and establishing the Public Service Loan Forgiveness program.

Just months after the Supreme Court blocked Biden’s first student debt plan, the administration also launched the Saving on a Valuable Education, or SAVE, plan.

The SAVE plan is an income boost repayment plan that reduces the amount of time and money some borrowers have to pay before their student loan debt is forgiven.

In February, the government began forgiving billions in debt under the SAVE plan, including $1.2 billion for 153,000 borrowers.

The White House said more than 7.7 million borrowers have signed up for the plan and encouraged millions more to do so.

The Ministry of Education said it would continue to identify borrowers eligible to have their debts forgiven on an ongoing basis.

Critics of the White House effort argue that student debt forgiveness is unfair and burdens taxpayers who choose not to pursue expensive college degrees or take out huge student loans.

Republicans have also accused the White House of trying to curry favor with young voters by forgiving their student loans ahead of the November election.

As the Biden administration launches its latest effort at student loan forgiveness, the SAVE program is already facing a legal challenge.

On March 28, eleven states led by Kansas filed a federal lawsuit in an attempt to block the forgiveness program. The lawsuit argued that the effort is no different than the president’s first attempt to wipe out student loan debt, which was rejected by the Supreme Court.

Kansas Republican Attorney General Kris Kobach vowed to take the case all the way back to the Supreme Court if necessary.

Along with Kansas, the lawsuit is supported by Alabama, Alaska, Idaho, Iowa, Louisiana, Montana, Nebraska, South Carolina, Texas and Utah.

Last June, the Supreme Court ruled that the Biden administration had exceeded its authority with its original plan, which relied on the HEROES Act, a law that authorizes the Secretary of Education to forgive or modify federal student loans due to a national emergency.

The same day it was blocked, Biden said the administration would pursue debt forgiveness through another legal authority in the Higher Education Act of 1965.

Senior administration officials said they are not concerned that the move to cancel millions in student debt would have an inflationary effect, based on analysis by the Council of Economic Advisers.

They argued that the move would have a positive impact on economic growth and the economic mobility of American families.

More than 43 million Americans have more than $1.6 trillion in federal student debt.