Biden’s Loan Forgiveness Plan

By: Julia Zhu

On June 30th, President Biden's plan to forgive student loans, which aimed to provide up to $20,000 in forgiveness, was struck down by the Supreme Court (SCOTUS). President Biden introduced in August 2022 a student loan forgiveness program that sought to eliminate $400 billion in federal student debt, benefiting around 20 million Americans. Student debt has reached a high of $1.7 trillion. This plan was aimed to help Americans struggling to pay off those loans. The plan would have canceled up to $10,000 (or $20,000 for Pell Grant recipients) per borrower earning less than $125,000 annually.

The court, now composed of a conservative majority due to President Trump's appointments, has led to a wave of conservative decisions. Following the Supreme Court's ruling, President Biden presented an alternative approach or Plan B. He proposed utilizing the Higher Education Act. It is a law established in 1965 that governs federal student loan programs, to offer relief to borrowers after the Court struck down the original plan. He acknowledged that the student loan forgiveness plan would be slower to roll out then previously promised.

The striking down of this student loan forgiveness plan is part of a larger problem. According to a recent poll by the Institute of Politics at Harvard Kennedy School, trust among 18 to 29 year-olds in the Supreme Court's ability to “make the right decisions” has decreased by 10 percentage points over the past five years. Some believe that SCOTUS has gone rogue, and that begs the question what happens when SCOTUS, which has historically maintained a non-partisan front, becomes so political and highly polarized that it no longer represents the will of the people. In many ways, it reflects the issues we have with our political system as a whole.

Sources:

https://www.nytimes.com/interactive/2022/08/26/your-money/student-loan-forgiveness-debt.html

https://www.nytimes.com/2023/07/04/opinion/letters/supreme-court-student-loans.html

https://www.washingtonpost.com/politics/2023/07/09/supreme-court-decisions-young-voters-student-loan-forgiveness-lgbtq/

https://www.aljazeera.com/economy/2023/7/6/us-roll-back-of-student-loan-forgiveness-hits-borrowers-economy

https://www.vox.com/23762367/student-loan-forgiveness-supreme-court-biden-cancellation