Two weeks after a Supreme Court defeat, the Biden administration said on July 14 that it would automatically forgive $39 billion in student debt for 804,000 borrowers.
The debt cancellation was made possible as a result of previous actions by the federal government to fix "longstanding failures in the student loan programs," the U.S. Department of Education said.
"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," Education Secretary Miguel Cardona said in a statement.
"This Administration will not stop fighting to level the playing field in higher education," he said.
Education-Loan Setback at the Supreme Court
Under the new repayment plans, borrowers on most plans are entitled to have their debt forgiven after 20 years of payments, depending on what and when they borrowed, and their plan types.
The administration said the move aims to correct years during which borrowers who were entitled to debt forgiveness often didn't get it, as the payments that should have moved them toward becoming debt-free weren't accounted for.
The announcement comes just weeks after Biden's defeat in the Supreme Court on June 30.
In a 6-3 decision, the Supreme Court blocked the Biden administration’s plan to cancel more than $400 billion in student loan debt for millions of borrowers.
The court's conservative majority ruled that Biden's plan exceeded his executive authority under the Higher Education Act.
Chief Justice John Roberts wrote for the court in Biden v. Nebraska, characterizing the decision as a straightforward interpretation of federal law.
Justice Elena Kagan dissented, in an opinion joined by Justices Sonia Sotomayor and Ketanji Brown Jackson.
Biden Campaign Promise
The decision was a major setback for Biden, who during his campaign had promised to cancel as much as $10,000 in student loan debt for borrowers.
The court's ruling means that millions of borrowers will continue to be burdened by student loan debt, which has reached a record high $1.7 trillion.
At the time, Biden said in a statement that he believed that "the Court's decision to strike down our student debt relief plan is wrong."
"But I will stop at nothing to find other ways to deliver relief to hard-working middle-class families," he said. "My administration will continue to work to bring the promise of higher education to every American."
"And those loans were forgiven,” he added. “But when it came to providing relief to millions of hard-working Americans, they did everything in their power to stop it.”
During his campaign for the White House, Biden had promised he was going to help lift the burden of student loans.
After federal courts in Missouri and Texas put the program on hold last year, the Biden administration came to the Supreme Court, asking the justices to weigh in on the issue.
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