The Biden administration warned Americans Thursday that 16 million student loan debts already forgiven by his administration would resume if Republicans sweep the midterms next week.
“If Republican officials get their way, tens of millions of Americans’ monthly costs will rise dramatically when student loan payments resume next year,” said a statement by the administration reported by CNBC.
“Working and middle-class Americans who could have up to $10,000 or $20,000 of their student debt relieved under the Biden Administration’s plan will remain under the burden of loan debt — preventing them from pursuing the dream of homeownership, saving up for retirement, or starting small businesses.”
Last summer, the White House unveiled its controversial loan relief plan to cancel up to $10,000 of student debt for individuals who earn less than $125,000 per year or less than $250,000 for married couples.
However, the U.S. Court of Appeals for the 8th Circuit ordered the Biden administration last month to halt canceling student loan debt after approximately 26 million Americans applied for the program.
The court granted an administrative stay while it considers a request for an injunction from six states — Arkansas, Iowa, Kansas, Missouri, Nebraska, and South Carolina — seeking to block Biden’s program. The states say Biden did not have the right to act without congressional approval.
While speaking at the Central New Mexico Community College in Albuquerque on Thursday, Biden said the Department of Education will have approved 16 million student loan forgiveness applications.
The president added that department officials would send the necessary paperwork to student loan service providers by the end of the week.
“The last step before the 16 million Americans can have their loan discharged,” Biden said, according to The Hill.
Biden also took a moment to again blame Republicans for the lower court’s order to pause the program, adding that “their outrage is just simply wrong, and I might add … I’m not being too political here, but hypocritical.”
“My plan’s going to make a real difference lowering the monthly costs for families,” Biden said.
Mainstream Democratic circles, including The Washington Post’s editorial board and former Treasury Secretary Lawrence Summers, have criticized the Biden administration’s plan.
Last year, House Speaker Nancy Pelosi (D-CA) was also skeptical of unilateral plans to cancel student loans, explaining to reporters that Biden didn’t have that kind of power.
Nixing $10,000 of student loan debt per borrower will cost $298 billion in 2022 and a total of $329 billion by 2031 if the policy is renewed each year, according to a nonpartisan analysis from the University of Pennsylvania’s Wharton School.
A report from the Brookings Institution observed that the wealthiest 20% of households owe one-third of student debt. In comparison, only 8% is owned by the bottom 20% — likely because graduate degrees are often necessary for the most lucrative professions.
Ryan Saavedra contributed to this report.
