Biden student loan forgiveness program

Table of Contents

Due to the pandemic financial situation of student borrowers was in a very poor state. Joe Biden made this a political opportunity before the 2020 elections and announced that he will take strong steps to reduce the burden of debt on students to garner support from student voters. And when he came to power White House announced loan relief to student borrowers. Biden administration took the decision to do so by releasing an official statement in August 2022. The reasons quoted in the official statement for debt relief are:

  • The economic crisis was led by the pandemic.
  • Even after taking inflation into account, the cost of a four-year college has almost tripled in five decades.
  • On average a borrower student graduates with a debt of 25000$. Middle-class students with such a high monthly EMI are in a difficult situation.
  • Condition is even worse for black borrowers with their disproportionately high default rate.

Announcements made for student loan debt relief

  • Department of Education will provide 20000$ relief to Pell Grant recipients and 10000$ to non-Pell Grant recipients if their income is less than 125000$.
  • Proposal of a new income-driven repayment plan to support low-income borrowers and provide student loan repayment extension and student loan repayment pause.
  • Reduction in the cost of college fees to protect future students was also proposed.

Expected Impact of the Biden student loan forgiveness announcement

  • Federal student loan debt forgiveness would have provided relief to 43 million borrowers and full exemption to about 20 million borrowers. The impact would have been among wide age groups: 21% to up to 25 years, 44% to 26-39 years 5% to above 40.Black borrowers were twice likely to get benefitted thus would have promoted racial equity. Joe Biden student loan forgiveness program has targeted low- and middle-income borrowers.

    Income Bracket

    percentage benefit

    less than 75000$


    75000$ to 125000$


    above 125000$


Following rules were also proposed to target income-driven repayment.

  • Cutting the repayment amount to half for undergraduates.
  • No borrower who earns less than 225% of the federal poverty level will have to make monthly payments.
  • The loan balance after 10 years of payments was proposed to be forgiven.

Opposition to Biden student loan forgiveness plan

On Feb 3, 2023, 128 House Republicans and another 43 senators filed a petition in the supreme court to stop the Biden student loan forgiveness, student loan repayment extension, and student loan pause program. Republicans accused the Biden administration of the Abuse of Heroes Act and called it a political gambit. Heroes Act was constituted in the wake of the 9/11 attack and the Biden student loan forgiveness program was meant to draw its legal powers from the same act as it enables the government to grant such reliefs in special situations like war, emergency, or a military operation. They are also accused of bypassing Congress which is the only body that has the authority to make fundamental changes of such nature. They called the program unconstitutional.

In a 4 January release, the Department of Education made its unapologetic stand clear by stating that they are confident in its legal authority to implement Biden student loan forgiveness program and filled a legal brief with the Supreme Court.

Final Supreme Court Verdict on student loan forgiveness

On 30 June U.S. Supreme Court finally gave a decision against Biden’s student loan relief of approx. 430 $ billion. The decision will directly affect 40 million borrowers and has taken down the Biden administration and that too before upcoming elections. Supreme Court has stated that the Heroes Act 2002 does not authorize federal student loan debt forgiveness and the administration cant spend billions of dollars of taxpayers’ money on student loan forgiveness. They can only make modest adjustments and additions to existing rules but cannot transform them completely.

Outcomes of the Verdict on student loan forgiveness

The decision has underscored the limit of the power of the president to enforce legislature without due approval from Congress.

Borrowers will have to resume paying their loans. according to the Department of Education, student loan interest repayment will start on 1 Sept. Though the department has offered protection from the forced collection and given ample time and a chance to move to flexible payment plans.

The decision is a big hit on the political stature of Joe Biden Student loan forgiveness was one of the key pledges that he made during his campaign in 2020 to garner support from student voters.

The decision has immediately put pressure on administration to look for an alternative to tackle the situation of debt students. Joe Biden has already given a statement regarding invoking the 1965 Higher Education Act increasing the power of the Education Department.


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