WASHINGTON D.C., DC — The phrase “didn’t the Supreme Court” trended on Twitter all day Friday because the Biden Administration is promising to forgive student loans again. Google says more Washington D.C. residents searched for information about student loans than people anywhere else in the country.
Only two weeks had passed since the U.S. Supreme Court rejected a previous loan forgiveness plan, causing skepticism and questions about whether this new plan would be blocked, as well.
THE QUESTION
Is the student loan forgiveness plan unveiled by the Department of Education the same as President Joe Biden's plan?
THE SOURCES
THE ANSWER
No, the student loan forgiveness announced Friday is not the same as the plan President Biden promoted until the Supreme Court rejected it.
WHAT WE FOUND
The Department of Education announced Friday morning that $39 billion in federal student loans will be forgiven in the next few weeks, and that the first of more than 800,000 borrowers had already received the good news.
This is the result of a plan announced in the spring of 2022 to fix counting errors for Income-Driven Repayment plans.
Income-Driven Repayment plans allow borrowers on limited incomes to make smaller monthly payments than the initial terms of the loan prescribed. Four repayment plans cover people at or near the federal poverty line. After 20 or 25 years of payments, any leftover balance is wiped away.
Federal officials claimed many borrowers had not gotten credit for payments they had made, leaving them making monthly payments longer than they should have, and said this adjustment would correct the errors. According to the Dept. of Education, the 800,000 borrowers who qualify for this loan forgiveness plan and incorrectly not been notified that they no longer needed to make payments.
That is different from the plan the Supreme Court struck down last month.
That one promised up to $10,000 of loan forgiveness for borrowers earning $125,000 or less, and up to $20,000 for borrowers who had received Pell Grants while in school. After challenges from several states, arguing that the Biden Administration overstepped its authority, the Supreme Court ruled that the Department of Education needed Congressional approval first because the law did not give it unilateral permission to forgive debt in this manner.