Staff Reports
President Biden made a big announcement on Wednesday. He and his team are canceling $7.7 billion in student loans for 160,000 people. This is a part of their plan to get rid of student debt. A lot of younger voters like this idea.
Biden cancels $7.7 billion in student loans for 160,000 borrowers in latest debt forgiveness https://t.co/gfdaq7lb9M
— The Washington Times (@WashTimes) May 22, 2024
The White House says this move is for people who are on the Saving on a Valuable Education (SAVE) repayment plan. It will also help those on income-driven repayment or Public Service Loan Forgiveness plans. The SAVE plan is from President Biden’s administration. It is meant to get rid of smaller student loans faster.
With this new action, President Biden has canceled $167 billion for 4.75 million people. He wants higher education to be a way into the middle class. He says, “I will never stop working to cancel student debt – no matter how many times Republican elected officials try to stop us.”
This isn’t the first time President Biden has canceled student loans this year. Last month, he canceled $7.4 billion for 277,000 people through the SAVE program. But some Republican-led states are fighting against this plan in court. They say President Biden is breaking the rules with this plan.
The White House doesn’t think these lawsuits will work. A senior official said they are “a political attack … without merit and law.” They also said borrowers who get debt forgiveness through SAVE shouldn’t worry. They believe strongly in their legal power to do this.
The SAVE plan is different from other government plans. It will help low-income borrowers more. Their monthly payments could be cut in half when the plan starts in July. The plan also offers more options for debt forgiveness. This is a big deal for people who struggle with student loans.
Studies show the SAVE plan could cost taxpayers a lot of money. Some think it could be up to $475 billion over 10 years. This is a lot of money, even more than President Biden’s first student loan forgiveness plan.
The lawsuits against the SAVE plan are just getting started. It will take a long time for the courts to decide on this. But for now, President Biden and his team are moving forward with their plan to cancel student loans.
