While President Joe Biden’s new student loan relief program for 804,000 borrowers won’t assist anywhere near the 26 million Americans he had been aiming for with his previous plan, this one is seemingly fully legal and won’t be knocked down by the Supreme Court. And instead of eliminating more than $400 billion in student debt, only a tenth of that, $39 billion, will be wiped out. But for those 804,000, the help is welcome.
This is not a handout or letting people off the hook. In each case, the borrower is only eligible for forgiveness after making the required 240 or 300 monthly payments. That’s 20 or 25 years of paying back loans, as originally agreed to when the money was taken out for education expenses decades ago. But too often there were errors in tabulating that the borrowers had actually made the 240 or 300 payments and were qualified to have their loans dismissed. That is now being fixed
Biden and his Education Department have also attacked loans for other specific groups, like 653,800 public employees, who received $45 billion in relief. Another 491,000 borrowers with a total and permanent disability were relieved of $10.5 billion in debts and the largest group of borrowers, 1.3 million, had $22 billion removed from the books because their schools cheated them or suddenly shut down.
Amid this relief, recall that student loans repayments for everyone have been frozen for more than three years, since March 2020, when COVID showed up. That moratorium ends in October and interest, which has also been frozen all this time as well, resumes in September.
Having a 43-month reprieve from paying off loans has been a great benefit for everyone, including millions who easily could have handled the payments. That in itself has been a level of relief.
When the court shot down Biden’s larger plan, he pledged to keep working on ways to ease the debt burden. As long as he’s following the law and targeting the assistance to those who need it most, we say, “Keep going, Joe.”
