Biden Wipes More Than $7M In Student Debt For 277K Borrowers: 'Too Many People Feel The Strain And Stress'

President Joe Biden is canceling yet another round of student loan debt amounting to more than $7.4 billion.

What Happened: Roughly another 277,000 borrowers, especially public sector workers, are expected to benefit from the revised plan.

Among the changes that are a part of the SAVE (Saving on a Valuable Education) plan, include:

• An income-driven repayment (IDR) plan, which bases monthly payment on income and family size.
• Payments will now be based on a smaller portion of adjusted gross income.
• If you make your full monthly payment, but it is not enough to cover the accrued monthly interest, the government covers the rest of the interest that accrued that month.
• This means that the SAVE Plan prevents your balance from growing due to unpaid interest.
• As of February, borrowers with $12,000 or less are forgiven after as few as 10 years.

More elements of SAVE will go into effect this summer.

The announcement was a follow-up from Monday, April 8, when Biden touted renewed efforts to offer relief to debt-saddled individuals and families.

“Too many people feel the strain and stress, wondering if they can get married, have their first child, start a family, because even if they get by, they still have this crushing, crushing debt,” he said.

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Why It Matters: More than 4 million people will benefit from the debt relief.

In total, the Biden administration has OKed some $153 billion in student loan debt — over 9% of all outstanding federal student loan debt.

The plan is not without its Republican critics. GOP officials like Georgia Attorney General Chris Carr say Biden is defying the conservative-leaning Supreme Court.

Last year, Supreme Justices ruled against Biden’s original loan forgiveness plan.

Two groups of Republican-led states have even filed lawsuits against the Biden administration over the initiative.

“Despite the Court having already settled this issue, the Biden administration continues to brazenly violate the law,” Carr said. “Georgia taxpayers have made it clear that they know it's wrong to be forced to pay off other people's student loans, particularly those with the highest earning potential. This is election-year politics and an egregious example of federal overreach, and we're fighting back yet again.”

The Education Department clapped back, pointing out how Congress gave the agency power to define terms of repayment plans in 1993.

“The Biden-Harris Administration won't stop fighting to provide support and relief to borrowers across the country — no matter how many times Republican elected officials try to stop us,” the department said.

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What’s Next: Expect Biden to contrast his student loan forgiveness program with the education policies of his 2024 presidential opponent, former President Donald Trump.

During a speech in Wisconsin this week, Biden made a subtle jab at the quadruple-indicted GOP candidate.

“We plan to cancel debt for borrowers who were cheated by universities that left students with unaffordable and little benefits for students,” Biden said. “You know one of those colleges was closed… I won’t mention it.”

The crowd laughed, seemingly in on Biden’s joke. Trump shut down Trump University in 2011 after multiple investigations, lawsuits and student complaints.

See below.

In 2018, a New York judge finalized a $25 million settlement between Trump and the Trump University victims.

Tickers To Watch: Several student loan-related tickers were in the red on Friday.

• SoFi Technologies SOFI saw its stock price dip more than 1.96% to $7.49 a share as of press time.
• SLM Corp. SLM was also in the red, trading at $20.70 a share — down by 1.4%.
• Discover Financial Services DFS, currently selling its student-loan unit, is down by 1.05% and trading at $121.65 a share.
• Navient Corp.‘s NAVI stock price was down 0.81%, trading at $16.52 a share.

At least one student loan servicing company was in the green: Nelnet Inc. NNI. At last check, the Lincoln, Nebraska-based firm was up more than 0.27%, trading at $94.58.

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