Biden's Student Loan Forgiveness Just Hit $127B — And He Found A Legal Loophole The Supreme Court Couldn't Stop

Here’s the thing: In June, the Supreme Court basically said “no” to Biden’s mass student loan cancellation plan. Game over, right? Wrong.

The administration just pulled off a workaround that’s honestly pretty clever — they’ve flagged $127 billion in federal student loans for potential cancellation by weaponizing existing regulations and anti-fraud measures that courts have historically upheld.

How They’re Actually Doing This

Instead of one massive broad-stroke cancellation, Biden’s team pieced together a patchwork of technically legal tools:

The breakdown:

• $22.5B wiped for 1.3M borrowers hit by college fraud or institutional closures
• $11.7B cleared for 513K borrowers with total permanent disabilities via streamlined process
• $51B canceled for 715K public servants through tweaked public-service loan forgiveness rules (post-2021)
• $42B gone for 855K borrowers dealing with botched income-driven repayment schemes

That’s roughly 30% of his original $430B plan that was blocked, accomplished through the back door.

The Context That Matters

40 million Americans are sitting on $1.6 trillion in collective federal student debt. Biden’s approach is essentially: “Can’t nuke it all at once? Fine. We’ll methodically dismantle it piece by piece using legal mechanisms.”

The risk? A federal court in New Orleans already temporarily suspended the borrower defense expansion, signaling future legal challenges are incoming. These workarounds aren’t bulletproof.

Bottom line: The Supreme Court won the battle, but Biden might be winning the war — just slower, quieter, and in ways harder to challenge in court.