Biden abruptly yanks the rug out from under student loan debtors who he

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Days after announcing $4.28 billion in student loan relief, President Joe Biden abruptly withdrew two of the plans affecting thousands of recipients.

With a few weeks left in his lame-duck presidency, Biden’s Education Department posted notices in the Federal Register last week making the announced withdrawals.

“The proposed regulations would have allowed the secretary of the U.S. Department of Education to cancel student loans for several groups of borrowers, including those who had been in repayment for decades and others experiencing financial hardship,” CNBC reported.

Citing “operational challenges in implementing the proposals,” the department said it would “commit its limited operational resources” in Biden’s final weeks of the presidency “to helping at-risk borrowers return to repayment successfully.”

(Video Credit: CBS News Chicago)

“The first was commonly referred to as ‘Plan B’ in reference to Biden’s first mass debt relief plan, which would have provided $10,000 in loan forgiveness for most borrowers; [the] Supreme Court struck that plan down last year,” according to Forbes. “The second student loan forgiveness plan would have provided relief to borrowers experiencing hardship. Much of the relief would have been implemented automatically under the plan based on a number of hardship “indicators” the Education Department had identified.”

Pending court battles, the incoming Trump administration, and the incompleteness of some of the plans spelled doom for the two student loan forgiveness plans.

Forbes reported:

But administration officials may have had broader reasons for officially withdrawing the draft regulations. They may have wanted to prevent the incoming Trump administration from quickly rewriting the draft rules in ways that could harm borrowers — for instance, by placing new restrictions on future student loan forgiveness. In addition, by withdrawing the regulations before the federal court considering the “Plan B” legal challenge has issued a final ruling, that lawsuit likely will become moot, ending the litigation before courts can issue potentially precedent-setting decisions that could limit the ability of a future administration to enact broad student loan forgiveness using the same legal authority under the Higher Education Act.

The Public Service Loan Forgiveness and Teacher Loan Forgiveness plans available for borrowers from the Education Department saw nearly 55,000 public service workers falling under the relief announced last week.

“The public servants approved for debt cancellation today include teachers, nurses, service members, law enforcement officials, and other public service workers who have dedicated their lives to giving back to their communities and who are finally earning the relief they are entitled to under the law,” Biden said in a statement.

“With the approval of another $4.28 billion in loan forgiveness for nearly 55,000 public servants, the Administration has secured nearly $180 billion in life-changing student debt relief for nearly five million borrowers,” U.S. Secretary of Education Miguel Cardona said in a statement.

Despite the U.S. Supreme Court striking down Biden’s debt forgiveness plan, the president has continued to come up with ways to work around the ruling. President-elect Donald Trump has criticized the efforts and reportedly will “pull the plug” on Biden’s plans.

“President-elect Donald Trump is poised to pull the plug on President Joe Biden’s yearslong push to cancel student debt for tens of millions of people as Republicans sweep into power in the coming months,” Politico reported in November.

“Trump transition advisers and outside allies have been discussing ways to quickly unwind the various Biden-era initiatives that offered new or easier paths to loan forgiveness for borrowers, according to two people familiar with the discussions,” the outlet added.

Elaine Rubin, director of corporate communications at Edvisors, told CNBC that many borrowers are “concerned about the impact of the new administration with their student loans.”

“Many borrowers are particularly concerned about the future of the PSLF program, which is written into law,” Rubin said. “Eliminating it would require an act of Congress.”

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Originally from New York, Powers graduated from New York University and eventually made her way to sunny South Florida. Powers also contributes to BizPac Review.