Two hypothetical college graduates who are married now have a combined annual income of $240,000; they each earn $120,000 per year.
Should an American who graduated from high school but never went to college—and who now works as a delivery truck driver, earning $43,950 per year (the median annual earnings for that job) be forced to help pay off the federal student loans of these two college graduates who make $240,000?
If former President Joe Biden had gotten his way, that truck driver and other hardworking American taxpayers would indeed have seen their tax dollars help pay off those loans.
When Biden was running for president in April 2020, he announced his plan for “forgiving student debt.”
“I propose to forgive all undergraduate tuition-related federal student debt from two- and four-year public colleges and universities for debt-holders earning up to $125,000,” Biden said.
His plan, he said, would also “[i]mmediately cancel a minimum of $10,000 of student debt per person.”
After he was elected president, Biden did not get Congress to enact new legislation to implement this plan. Instead, he took unilateral executive action in an attempt to do so—and his administration claimed this action was justified under a law that had been enacted under former President George W. Bush.
In 2003, Bush signed the Higher Education Relief Opportunities for Students Act, aka the HEROES Act.
This act, said its official summary, “[a]uthorizes the Secretary of Education to waive or modify any requirement or regulation applicable to the student financial assistance programs under title IV of the Higher Education Act of 1965 as deemed necessary with respect to an affected individual who: (1) is serving on active duty during a war or other military operation or national emergency; (2) is performing National Guard duty during a war, operation, or emergency; (3) resides or is employed in an area that is declared a disaster area by any Federal, State, or local official in connection with a national emergency; or (4) suffered direct economic hardship as a direct result of a war or other military operation or national emergency.”
As the nation headed into the 2022 midterm elections, Biden announced his student loan forgiveness plan. “On August 24, 2022,” explained the Congressional Research Service, “the Biden Administration announced it would invoke the Higher Education Relief Opportunities Act of 2003 (HEROES Act) to carry out a ‘one-time student loan debt relief policy’ to ‘address the financial harms of the [COVID-19] pandemic for low- and middle-income borrowers.’ Under the one-time student debt relief policy (HEROES Act policy), ED (Education Department) would have cancelled up to $10,000 in qualifying HEA Title IV federal student loan debt for borrowers with an adjusted gross income (AGI) in 2020 or 2021 of less than $125,000 (for individuals or married borrowers who filed federal income taxes separately) or $250,000 (for married couples filing jointly and certain other individuals).”
So, under Biden’s plan, a law that had been designed to help individuals “serving on active duty during a war or other military operation or national emergency” or had “suffered direct economic hardship as a direct result of a war or other military operation or national emergency” could be used to grant general federal student loan forgiveness in the wake of the COVID-19 pandemic.
On Sept. 26, 2022, the Congressional Budget Office sent a letter to Sen. Richard Burr, R-N.C., and Rep. Virginia Foxx, R-N.C., that estimated the cost of the Biden plan. “As of June 30, 2022, 43 million borrowers held $1.6 trillion in federal student loans,” said this letter. “About $430 billion of that debt will be canceled, CBO estimates.”
