Following a defeat at the SCOTUS, the Biden Administration is turning to Plan B, and just announced forgiveness for $39 billion in student debt for over 800,000 borrowers.
According to CNBC:
The relief is a result of fixes to the student loan system’s income-driven repayment plans. Under those repayment plans, borrowers get any remaining debt canceled by the government after they have made payments for 20 years or 25 years, depending on when they borrowed, and their loan and plan type.
In the past, payments that should have moved a borrower closer to being debt-free were not accounted for, according to the Biden administration.
To bring people over the line for forgiveness, the Biden administration counted payments for borrowers who’d paused their payments in certain deferments and forbearances and those who’d made partial or late payments.
Although the forgiveness is a huge victory for borrowers, it is relief to which they were entitled, said Persis Yu, deputy executive director at the Student Borrower Protection Center.
This is a fraction of the size of the initial Biden student debt bailout, which would’ve impacted 37 million people. The Congressional Budget Office’s estimate for the cost of the Biden debt forgiveness plan recently struck down by the SCOTUS was $430 billion, while one estimate from the Wharton School put the true price tag at over $1 trillion. Thus, best case scenario for Biden, he only forgave about 9% of the debt he initially hoped to.
Matt Palumbo is the author of Fact-Checking the Fact-Checkers: How the Left Hijacked and Weaponized the Fact-Checking Industry and The Man Behind the Curtain: Inside the Secret Network of George Soros
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