Some lawmakers issued statements last week questioning the newest forgiveness action's legal footing.
The sweeping — and now-defunct — forgiveness plan President Joe Biden announced in August 2022 rested on the Heroes Act of 2003. That law gave the president power to revise student loan programs during national emergencies.Abby Shafroth The Supreme Court disagreed with the Biden administration. The Department of Education needs authorization from Congress to cancel such a large amount of consumer debt, justices said.
Beneficiaries of the new policy are predominantly those who are or once were in the Income-Contingent Repayment program, the only one of the four IDR plans that has existed long enough to deliver debt forgiveness, Kantrowitz said. The average borrower in that program has a loan balance of $48,000, he said.That said, the Biden administration had some leeway when deciding on the scope of forgiveness, Kantrowitz said.