President Joe Biden is working to clear some $127 billion in student loan debt despite a United States Supreme Court ruling against him for bypassing Congress.
The Wall Street Journal reported that Biden and his administration is working on using a variety of rules and executive branch tools to relieve more than 3 million student borrowers of $127 billion in loans.
Biden's initial $430 billion plan to cancel up to $20,000 in student debt for an estimated 40 million Americans under the "Heroes Act" was struck down by the U.S. Supreme Court 6-3 in June, saying that the authority to cancel federal debt resides with Congress.
"All this leads us to conclude that the basic and consequential tradeoffs inherent in a mass debt cancellation program are the ones Congress would likely have intended for itself," the majority opinion of the court states. "The HEROES Act provides no authorization for the [Secretary of Education's] plan even when examined using the ordinary tools of statutory interpretation — let alone clear Congressional authorization for such a program."
The new push by the administration to cancel the $127 billion in debt represents a total of about 30% of Biden's initial plan since taking office in 2021, according to the report.
The Journal notes that 40 million student borrowers nationwide have accrued $1.6 trillion in total debt.
The report found around $34 billion already canceled for borrowers that claimed fraud by the schools or other court settlements that were backlogged and not yet acted upon, as well as more than 500,000 borrowers with a permanent disability.
Another $51 billion in forgiveness went to more than 715,000 individuals serving the public, and 850,000 borrowers saved $42 billion from "inaccuracies" in the income-driven repayment program, according to the report.
The move to further cancel the loans comes as the federal pause on payments brought on by the COVID-19 pandemic three years ago resumes this month.
Restarting the repayments has not been smooth.
The Washington Post reported Monday that one of the servicers of the loans, Missouri Higher Education Loan Authority, failed to send "timely statements" to an estimated 830,000 borrowers that caused them to miss their first payment since the reset.
The report said the Biden administration is planning on withholding $7.2 million from its contract with the entity for the errors.
"We will not allow borrowers to suffer the consequences of gross servicing failures," Education Secretary Miguel Cardona said in a statement to The Washington Post.
Charles Kim ✉
Charles Kim, a Newsmax general assignment writer, is an award-winning journalist with more than 30 years in reporting on news and politics.
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