The plan, which would not go into effect until after President Trump takes office, would "specify the secretary's authority to waive all or part of any student loan debts owed to the Department based on the secretary’s determination that a borrower has experienced or is experiencing hardship related to such a loan.”
Matt Lamb of The College Fix says the cost could be closer to $600 billion over the next 10 years.
Actually, because of the Education Department's broad definition of "hardship" as that which is "likely to impair the borrower's ability to fully repay the federal government" or that which "renders the costs of enforcing the full amount of the debt not justified by the expected benefits of continued collection of the entire debt," the American Enterprise Institute says the final costs are incalculable.
"The regulation would define hardship very broadly and give the secretary of education very broad authority to bail out student loan borrowers at the cost of other taxpayers," Lamb says, noting that proviso would likely be abused.
The Biden administration has attempted several student loan bailouts over the past four years. The Supreme Court struck down the 2022 proposal to forgive up to $20,000 in federal student loan debt for Pell Grant recipients and $10,000 for others earning less than $125,000 annually.
The Saving on a Valuable Education plan is currently frozen due to legal challenges.
Now, with House Education Committee Chairwoman Virginia Foxx (R-North Carolina) calling it illegal and demanding the Department of Education nix it, this latest effort could be dead on arrival.
Lamb suggests the Democrats' strategy is simply to push student loan forgiveness programs, even if they get struck down, to "win political points."
