News Story

Defying Supreme Court and Congress, Biden unilaterally offers $39B in student loan forgiveness

President blames ‘past administrative failures’ for loans not being discharged earlier

President Joe Biden will “automatically discharge” $39 billion in student loan debt for 804,000 borrowers, the U.S. Department of Education announced Friday.

Biden’s announcement stands in direct defiance of a U.S. Supreme Court ruling, Biden vs. Nebraska, which found the president does not have the authority to forgive student loans. That ruling was made in June.

Earlier that month, Biden signed a debt ceiling deal that terminated his student loan pause, effective 60 days from June 30. That pause will end Aug. 29.

The president’s announcement Friday presented the forgiveness not as a blanket offering, but the fixing of a failing in the system.

“For far too long, borrowers fell through the cracks of a broken system that failed to keep accurate track of their progress towards forgiveness,” U.S. Secretary of Education Miguel Cardona said in a statement accompanying the announcement. “By fixing past administrative failures, we are ensuring everyone gets the forgiveness they deserve, just as we have done for public servants, students who were cheated by their colleges, and borrowers with permanent disabilities, including veterans.”

The Mackinac Center in May sued the U.S. Department of Education over the student loan pause, arguing it is an unconstitutional overstep of the president’s authority. Despite Biden’s signing the debt ceiling deal that terminates the pause, that lawsuit is ongoing.

Patrick Wright, the Mackinac Center’s vice president for legal affairs, has said the suit must continue so the U.S. Department of Education does not just employ a workaround.

Michigan Capitol Confidential is the news source produced by the Mackinac Center for Public Policy. Michigan Capitol Confidential reports with a free-market news perspective.