Biden’s $1.2 billion in student debt cancellation praised, GOP criticized

In a move celebrated by many, the Biden administration has approved $1.2 billion in student debt cancellation for nearly 153,000 borrowers nationwide.

Among those hailing the decision is New Jersey consumer advocate Lisa McCormick, who emphasized the transformative impact of the relief on struggling borrowers, particularly in New Jersey, where 4,180 residents will save a combined total of $35.3 million due to the debt cancellation.

“Student debt cancellation is an essential, life-changing policy that is changing lives today,” said McCormick, who was a Democratic US Senate contender in 2018. “This relief will be transformative for borrowers who have been struggling to pay their loans for years, including thousands of New Jersey residents who will now be able to purchase homes, start a business, save for retirement, and more.”

McCormick’s praise for the Biden administration’s action was coupled with her sharp criticism of Republican opposition to debt relief for working-class Americans.

She pointed to the ‘recent Pearl Harbor Day vote’ by New Jersey Republican Congressmen Thomas H. Kean, Jr., Jeff VanDrew, and Chris Smith, who supported a resolution aimed at blocking a new student loan repayment option tied to income.

“The stingy Republican measure would have been particularly harmful to low- and middle-income borrowers, community college students, and borrowers who work in public service,” McCormick asserted. “Republicans who don’t think twice about giving huge tax breaks to ultra-wealthy billionaires and large corporations, tell us that when it comes to helping out working families with student debt relief, it’s too much money, it will raise the deficit, and we can’t afford it.”

“Several Republican lawmakers had no issue in having their COVID-19 relief loans forgiven, but feel no shame in shaking down low-income and working-class Americans for their student loans,” said McCormick, who faulted US Senator Robert Menendez for his failure to contain the rising cost of education and allowing the federal government to relax lending standards in the 1990s and 2000s, making it easier for students to borrow large sums of money.

“College tuition and fees have significantly outpaced inflation over the past few decades, as establishment Democrats like Bob Menendez have failed to counter the harmful impact of trickle-down economic policies because they are dependent on corporate campaign cash,” said McCormick.

Senator Bob Menendez was silent about the latest debt relief announcement, but a year ago he joined a rally marking the start of oral arguments at the Supreme Court, which decided 6-3, to strike down the administration’s previous student loan forgiveness program.

“Cancelling student loan debt is the right thing to do. It is the right thing to do when we grant tens of millions of hard-working Americans some economic relief. It is the right thing to do when we fight for an equitable higher education system where every American can have a shot at prosperity. It is the right thing to do when we live up to our founding creed of fairness, affording today’s generation the same opportunities that prior ones enjoyed,” said Sen. Menendez. “Opponents of student loan cancellation are on the wrong side of history; they are using wrong arguments to pursue a wrong policy for the wrong reasons.”

McCormick said 18 MAGA Republicans who oppose relief for student loan borrowers, had almost $18 million of their own loans forgiven through the Paycheck Protection Program (PPP).

The latest debt relief initiative targets borrowers enrolled in the Saving on a Valuable Education (SAVE) plan, fulfilling the administration’s promise to accelerate forgiveness for those who borrowed lower amounts for college.

Under this plan, borrowers who meet specific criteria, including enrollment in SAVE and at least 10 years of payments, can have their debt wiped clean.

Biden, in an email to borrowers across all 50 states and territories, highlighted his administration’s commitment to addressing the student loan crisis, describing it as a barrier to opportunity. He outlined efforts to expand Pell grants and promised to continue advocating for American families.

Despite the administration’s targeted approach and efforts to provide relief, both praise and frustration have characterized responses to its debt policies. Activists applaud the initiatives while urging for more comprehensive action, while conservatives remain critical, citing concerns about the impact on taxpayers.

As servicers begin processing the forgiveness, borrowers can anticipate seeing relief reflected in their accounts in the coming weeks. The U.S. Department of Education will continue identifying and discharging eligible borrowers under SAVE, reaffirming its commitment to affordable higher education and long-term debt relief for all.