Sunday, April 14, 2024

Biden keeps wiping out student loan debt, even though the Supreme Court said no

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Even though the Supreme Court said no to President Joe Biden’s big plan to forgive student loans, his team found a sneaky way to cancel $48 billion in debt. They did it by using existing programs for specific groups, like public workers, people tricked by for-profit colleges, and those who paid for 20 years.

These programs are different from the rejected one that would have wiped out $430 billion all at once from the $1.6 trillion owed. Since Biden started, they forgave $127 billion for nearly 3.6 million people – more than any other president. They fixed old mistakes and temporarily boosted some relief programs. Unlike Trump, who slowed things down, Biden made it easier for people to get their student loans forgiven.

Critics from the other side say Biden is breaking the law to avoid the Supreme Court’s decision. They’re taking legal action, saying some of his moves are not okay.

A big part of the forgiven debt, about $42 billion, went to nearly 855,000 people in income-driven repayment plans. These plans, around since 1993, lower monthly payments based on income and family size. But the government often messed up keeping track of payments. Last year, they found thousands of loans still not forgiven when they should have been.

So, Biden decided to fix this by counting past payments for forgiveness. This helped those who were wrongly put on long breaks where they didn’t have to pay. Critics call it illegal, but Biden’s team is pushing back, and there’s a lawsuit in progress.

For public workers, Biden also expanded a program called Public Service Loan Forgiveness, wiping out $51 billion for 715,000 borrowers. It erases debt for those working in public service jobs after 120 monthly payments. Biden’s changes made more people eligible, and over 95% of those forgiven benefited from these adjustments.

There’s another program for people defrauded by colleges, called borrower defense to repayment. Biden’s team canceled $22.5 billion for 1.3 million borrowers. Recently, $37 million was forgiven for University of Phoenix students because the school misled them about job prospects. This program existed for a long time, but Biden cleared a backlog of claims from the Trump era.

Disabled borrowers also got a break. Nearly 513,000 received $11.7 billion in forgiveness since 2021. Before, they had to prove their disability with documents, but Biden made it simpler by using data from the Social Security Administration.

In short, Biden’s team found ways to forgive a lot of student debt through existing programs, fixing old mistakes and making things easier for different groups.

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