WASHINGTON (TND) — The Biden administration has cancelled approximately 10% of all outstanding student debt in the U.S. with its latest round of forgiveness Wednesday, according to Forbes.
The administration forgave $6.1 billion in student debt for more than 300,000 borrowers from private for-profit system The Art Institutes this week. The schools, which shut down last year, falsified data, misled students and conned borrowers into accumulating significant debt without leading to promising career opportunities, according to the Education Department.
"For more than a decade, hundreds of thousands of hopeful students borrowed billions to attend The Art Institutes and got little but lies in return," Education Secretary Miguel Cardona claimed Wednesday. "We must continue to protect borrowers from predatory institutions—and work toward a higher education system that is affordable to students and taxpayers."
Wednesday’s cancellation contributed to the nearly $29 billion Biden has forgiven for borrowers perceived as taken advantage of, enrolled in schools that closed abruptly and covered by related court settlements, according to the announcement. Overall, Biden has forgave at least $160 billion in students loans, which amounts to 10% of the outstanding debts nationwide, according to Forbes.
In a statement Wednesday, Biden contrasted himself with former President Donald Trump, who he suggested cancelled far less debt through similar actions.
“While my predecessor looked the other way when colleges defrauded students and borrowers, I promised to take this on directly to provide borrowers with the relief they need and deserve,” Biden said.Last month, Biden introduced provisions to the Saving on a Valuable Education (SAVE) plan, dubbed the New Plans, to provide student debt relief. An analysis by the Wharton School of the University of Pennsylvania estimated roughly 750,000 households making over $312,000 will have their debt erased under the New Plans.
The eliminated debt amounted to more than $25 billion from high-income households, according to the analysis. The New Plans will purportedly cost approximately $84 billion which, combined with the SAVE program, increases the total price tag to nearly $560 billion.
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Republican lawmakers have threatened to challenge Biden’s debt cancellation efforts. Following the release of the New Plans, Missouri Attorney General Andrew Bailey told the president he would see him in court. Meanwhile, House Speaker Mike Johnson, R-La., argued Biden’s policies were illegal and “completely backward.”
“The national debt is $34 trillion. Inflation is making life unaffordable and this administration is now forcing the American people to pay the costs of student loans that borrowers willingly signed up for,” the speaker said.The Supreme Court ruled against Biden's previous student debt relief program, with a majority of justices arguing the president lacked the authority to direct Cardona to cancel a large amount of debt without congressional authorization.
“Can the Secretary use his powers to abolish $430 billion in student loans, completely canceling loan balances for 20 million borrowers, as a pandemic winds down to its end?’” Chief Justice John Roberts offered. “We can’t believe the answer would be yes.”
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