Democratic presidential hopeful Kamala Harris announced that she would not stop fighting student debts after the latest blow from the US Supreme Court. The court rejected the Biden administration’s plea to reinstate a socialist plan to lower the student loans of millions of borrowers.
The plan, Saving on a Valuable Education (SAVE), was already blocked by the 8th Circuit Court of Appeals, and the Biden administration appealed against this ban to the Supreme Court, which has now upheld the circuit court’s decision.
After the Supreme Court verdict, Kamala Harris took to X, writing that she and President Joe Biden have already reduced student loans by $170 billion for nearly 5 million borrowers since the start of their tenure. Harris vowed to keep on “fighting” to protect the SAVE plan to reduce student debts and “build an economy” for every American.
More than 12 Republican states dragged the Biden administration into legal battles, claiming that the SAVE plan would have caused the American economy to suffer by at least $475 billion in the next decade. According to the Congressional Budget Office, this plan would have cost the federal government $276 billion.
Biden introduced the SAVE plan just last year after the high court stopped his even more sweeping program to forgive up to $20,000 per borrower.
The SAVE plan was supposed to reduce monthly loan payments from 10% to 5% of the borrower’s discretionary income. Americans earning less than 225% of the federal poverty line would have been exempted from their loans. Currently, this threshold is set at $32,800 per year.
Furthermore, borrowers who have made timely payments for ten years would have also received a $12,000 discount on the loan.
Student loan forgiveness was one of Biden’s major promises in the 2020 presidential election campaign. He has tried to fulfill it to a great extent, even though it has pushed him into legal trouble and severe criticism.
In July of this year, Biden announced that he would forgive loans of $1.2 billion for government employees. According to the Education Department, his collective loan reduction has reached $167 billion and has benefitted 4 million borrowers in the last three and a half years.
The loan forgiveness issue has become even more important near the presidential election as Harris tries to win the support of young voters.
However, Republicans have slammed the Democrats for not passing the loan forgiveness measures through Congress, which is the country’s purse and is responsible for deciding the fate of these programs.
Critics believe that passing student loan forgiveness programs unilaterally allows the president to pursue a political agenda by using the taxpayers’ money.
