CULVER CITY, Calif. — President Biden said Wednesday he is canceling $1.2 billion in student loans for nearly 153,000 borrowers under the SAVE Plan he created after a separate forgiveness plan was blocked by the Supreme Court.
Borrowers are receiving an email from Mr. Biden saying they are approved for forgiveness and don’t need to do anything else.
They are the first borrowers to see their loans discharged under the plan, which provides relief to individuals who borrowed $12,000 or less and have been paying down their debt for at least 10 years.
Mr. Biden highlighted the move during a California fundraising swing, saying a college degree is still a ticket to a better future.
But, he said, that ticket “is too expensive, and too many Americans are still saddled with unsustainable debt in exchange for a college degree.”
“This kind of relief can be life-changing for individuals and for their families, and it’s good for the economy as a whole. By freeing millions of Americans from the crushing debt of student loan programs, it means they can finally get on with their lives instead of their lives being put on hold,” Mr. Biden said at the Culver City Julian Dixon Library.
Los Angeles Mayor Karen Bass, in opening remarks for Mr. Biden, said addressing student debt should be thought of as an “economic motivator” that helps former students pursue the careers they want and buy homes.
Debt forgiveness is a key agenda item for Mr. Biden and his Democratic allies. He is trying to keep young voters in his corner after they fueled his 2020 win over former President Donald Trump.
Facing a rematch, some young voters appear to be abandoning the 81-year-old president over his position on Israel’s war in Gaza or other issues. Several pro-Palestinian demonstrators shouted at the motorcade as Mr. Biden pulled up, with one screaming, “Genocide supporter.”
An attempt to revise the Free Application for Federal Student Aid, or FAFSA, form that allows students to apply for college loans suffered a lousy rollout, with some students unable to fill it out.
Hoping to buoy young borrowers, Mr. Biden established the Saving on a Valuable Education Plan as a workaround, after an attempt to wipe out debt for tens of thousands of student borrowers and Pell Grant recipients ran into political and legal roadblocks.
“That didn’t stop me, I announced we were going to pursue alternative paths for student debt relief,” Mr. Biden said.
The SAVE Plan allows for forgiveness based on the original principal balance of federal loans and the number of years borrowers have been making payments, as well as income and family size.
“With today’s announcement, we are once again sending a clear message to borrowers who had low balances: if you’ve been paying for a decade, you’ve done your part, and you deserve relief,” said Education Secretary Miguel Cardona. “Under President Biden’s leadership, our administration has now approved loan forgiveness for nearly 3.9 million borrowers, and our historic fight to cancel student debt isn’t over yet.”
All told, the administration said Mr. Biden has wiped out nearly $138 billion in student debt for nearly 4 million borrowers through more than two dozen executive actions.
Mr. Biden’s latest announcement got mixed reviews along partisan lines.
Sen. Elizabeth Warren, Massachusetts Democrat, called it a “double woo-hoo moment,” while the research arm of the Republican National Committee reminded Democrats they once thought loan forgiveness required an act of Congress.
RNC Research posted a video clip on X of former House Speaker Nancy Pelosi saying as much in July 2021: “People think that the president of the United States has the power for [student loan] debt forgiveness. He does not.”
Others said the program defies the spirit of the Supreme Court’s decision against prior forgiveness plans and will incentivize colleges to raise tuition.
Mr. Biden’s “drip, drip, drip student loan forgiveness workarounds are lawless and make a mockery of the separation of powers. They set a dangerous precedent that consolidates more power in the executive branch,” said Elaine Parker, president of the Job Creators Network Foundation. “College students themselves are the biggest losers of Biden’s college debt forgiveness workarounds because colleges are given a blank check to continue overcharging and saddling them with debt.”
• Jeff Mordock, traveling with the president, reported from Culver City.
• Tom Howell Jr. can be reached at thowell@washingtontimes.com.
• Jeff Mordock can be reached at jmordock@washingtontimes.com.
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