President Biden announced Wednesday that his administration is canceling $7.7 billion in student loans for 160,000 borrowers.
It’s the latest in a series of election-year moves to wipe out student debt, an issue with broad appeal to younger voters who are abandoning Mr. Biden in droves.
The White House said the latest round of relief is aimed at borrowers enrolled in the Saving on a Valuable Education (SAVE) repayment plan as well as those in income-driven repayment or Public Service Loan Forgiveness plans.
SAVE is an income-driven repayment plan implemented by the Biden administration to cancel smaller student loans more quickly.
With the latest move, Mr. Biden has canceled $167 billion for 4.75 million borrowers.
“From day one of my Administration, I promised to fight to ensure higher education is a ticket to the middle class, not a barrier to opportunity. I will never stop working to cancel student debt – no matter how many times Republican elected officials try to stop us,” Mr. Biden said in a statement.
Last month, Mr. Biden canceled $7.4 billion in loans for 277,000 through SAVE, a program that Republican-led states are already challenging in courts.
Separate groups of GOP state attorneys general in April sued Mr. Biden over SAVE, saying he again overstepped his authority to cancel student debt.
Some of the states, including Missouri, are among those that successfully sued the Biden administration over its sweeping student loan plan, which was ruled unconstitutional by the U.S. Supreme Court last year.
In the lawsuit, the attorney generals accuse Mr. Biden of “unilaterally trying to impose an extraordinarily expensive and controversial policy that he could not get through Congress.”
“This latest attempt to sidestep the Constitution is only the most recent instance in a long but troubling pattern of the President relying on innocuous language from decades-old statutes to impose drastic, costly policy changes on the American people without their consent,” they said.
A senior White House official told reporters last month that the lawsuit was nothing more than “a political attack … without merit and law.”
“This lawsuit is another attack by Republican attorney generals who want to deny millions of their own constituents access to affordable repayment plans,” the official said.
Another official said borrowers who received debt forgiveness through SAVE shouldn’t worry about the chance that their debt will be reinstated if the GOP lawsuit is successful.
“We believe very strongly in our legal authority here,” the official said.
Before SAVE, the federal government had several income-driven loan repayment plans that linked monthly payments to a borrower’s income and family size.
However, Mr. Biden’s plan offers more generous terms, especially for low-income borrowers. Some borrowers will see their monthly payments slashed in half when the plan is fully operational in July.
Mr. Biden’s plan also offers borrowers an opportunity for more forgiveness if they make monthly payments for a certain number of years under SAVE. While other government programs offer that option, the time to debt relief is shorter under SAVE.
Studies of SAVE estimate the cost to taxpayers ranges from $138 billion to $475 billion over 10 years. In comparison, Mr. Biden’s first student loan forgiveness program was expected to cost about $400 billion.
The lawsuit will take some time to wind through the courts. Before a judge can rule on the merits of the case, they must decide whether the states have standing to bring legal challenges. The states must show that they have incurred the sort of legal injury required to bring a lawsuit.