Joe Biden Student loan forgiveness

 Student loan forgiveness

Biden Chips Away at Student Loan Debt, Bit by Bit, Amid High Expectations

The president announced another $1.2 billion in forgiveness, bringing the total canceled to $138 billion. 

But the piecemeal efforts have garnered him little praise.Student loan balances wiped for the first batch of borrowers in Biden's SAVE planAn email went out this morning to some student loan borrowers basically saying, you're debt free.

On Wednesday, the federal Education Department zeroed out loan balances for nearly 153,000 borrowers. 

They are people who borrowed $12,000 or less, have been paying their student loans for at least 10 years, and enrolled in the Biden administration's. 

We're providing debt relief to people who need it the most," said Education Secretary Miguel Cardona on Wednesday in an interview on NPR's Morning Edition. 

"We're also addressing the root cause of the issue, which is, the cost of college is out of control," Cardona said.

The Saving on a Valuable Education (SAVE) repayment plan has become a key vehicle for President Biden and Secretary Cardona since the Supreme Court last year struck down the administration's plan to forgive hundreds of billions of dollars in federal student loan debt. 

Republican lawmakers have tried to stop the SAVE plan, arguing that it is outside of the administration's authority and criticizing the president for campaigning for votes with the new policy.

Wednesday's debt cancellation announcement comes after a shaky rollout of the new FAFSA application resulting in a delay of student aid award letters, along with people unable to fill out the form.By paying off people's excessive debts, you encourage colleges to keep charging more and more. 

Is there a moral hazard involved in forgiving debts which allows colleges to encourage people to borrow more in the future?

It's a moral hazard if you're only doing debt relief, but I believe we're balancing it out with accountability on colleges and making sure that the return on investment is clear. 

And, where we're putting pressure on those colleges that are charging $150,000 to $200,000 for a degree that students could get for $50,000 somewhere else.