JUST IN: Biden Administration Announces $39 Billion Student Debt Bailout

The Biden administration is continuing its effort to work around a recent Supreme Court ruling slapping down its effort to abolish huge swaths of student loan debt, and today it made a technical change to the terms of loans that could eliminate billions of dollars in debt for existing borrowers.

The change, announced by the U.S. Department of Education, seeks to cancel up to $39 billion in student loan debt for more than 804,000 borrowers who have owed their debts for 20 years or more. The program builds on an earlier initiative announced in April that claims to address “historical inaccuracies” in the government’s partnership with loan servicers who it claims are not following through on pledges to keep rates low as part of an income-driven repayment program.

From POLITICO:

What happened: Department officials revised borrowers’ accounts to retroactively count months towards forgiveness under the income-driven repayment plans that previously weren’t counted or wouldn’t typically qualify.

Those months of credit pushed the more than 804,000 borrowers to reach the threshold for loan forgiveness of 20 or 25 years, depending on the type of income-driven repayment plan.

Department officials said borrowers who are set to receive loan forgiveness would begin receiving notices in the “coming days” and that discharges would begin 30 days after that.

The alternative strategy by the Biden administration comes on the heels of a decision by the Supreme Court to nix its plans to eliminate more than $400 billion in student loan debt by what the court claimed was an overreach on executive action. Progressives on the left, led by U.S. Senator Elizabeth Warren (D-MA) and “Squad” member Congresswoman Ayanna Pressley (D-MA) have pressured President Joe Biden to push the boundaries of the White House’s ability to address a crisis that has seen student debt levels exceed the nation’s entire debt for credit cards.

Progressives like Warren, Pressley, and Rep. Alexandria Ocasio-Cortez (D-NY) had a meltdown following the court’s ruling, accusing Justice Sam Alito of “corruption” while failing to answer tough questions about the legality of a strategy that was questionable from the beginning.

President Biden, who is falling behind former President Donald Trump in the polls, needs the votes of young people if he is to secure a second term in the White House, and his strategy to pursue student loan forgiveness regardless of legal decisions is at the heart of his reelection plans. The latest news builds on an announcement made by the president just hours after the court’s decision where President Biden lowered the threshold for discretionary income amounts put toward repayments as well as the total number of years in debt before total forgiveness.