Joe Biden cancels student loans worth $7.4 billion, 360,000 borrowers to get benefit. Will Republicans stop it?

Months before the 2024 US Presidential Election, President Joe Biden has canceled student loans worth $7.4 billion that will help more than 277,000 borrowers. According to 'The New York Post', the Education Department announced the latest round of cancellations Friday is an update on the progress of its SAVE Plan. It canceled loans for almost 4.3 million student borrowers. With the latest action, the Education Department has now approved cancellation for about 360,000 borrowers through the new repayment plan, totaling $4.8 billion.

SAVE Plan

The SAVE Plan is an updated version of a federal repayment plan that has been offered for decades, but with more generous terms. The first income-driven repayment option was created by Congress in the 1990s for people struggling to afford payments on standard plans. It capped monthly payments to a percentage of their incomes and canceled any unpaid debt after 25 years. Similar plans were added later, offering cancellation in 20 years.

One-time cancellation in 2022

Joe Biden announced the plan in 2022 alongside his broader proposal for a one-time cancellation of up to $20,000 for more than 40 million people. It was struck down by the Supreme Court, but the SAVE Plan moved forward and initially escaped legal scrutiny.

Lawsuits against loan cancellation

The latest cancellation program may face hurdles from two new lawsuits challenging the plan's legality. Two groups of Republican-led states, fronted by Kansas and Missouri, recently filed federal suits arguing that the Biden administration overstepped its authority in creating the repayment option.

Joe Biden firm on loan cancellation

However, in a statement issued Friday, Joe Biden said, "From day one of my Administration, I promised to fight to ensure higher education is a ticket to the middle class, not a barrier to opportunity." He added, "I will never stop working to cancel student debt, no matter how many times Republican elected officials try to stop us."

FAQs:

What is the SAVE Plan?
The SAVE Plan is an updated version of a federal repayment plan, created by Congress in the 1990s for people struggling to afford payments on standard plans. It capped monthly payments to a percentage of their incomes and canceled any unpaid debt after 25 years. Similar plans were added later, offering cancellation in 20 years.

What did Joe Biden say about hurdles placed in the path of loan cancellations?
Joe Biden said that he would never stop working to cancel student debt, no matter how many times Republican elected officials try to stop him