Massive Student Debt Relief! Biden Administration Cancels $7.7 Billion in Student Loans for 160,000 Borrowers!
The Biden administration is canceling student debts for an additional 160,000 students using a combination of existing programs.
On Wednesday, the Education Department issued the latest wave of cancellations, erasing $7.7 billion in federal student loans. With the latest action, the administration said that it has canceled $167 billion in student debt for roughly 5 million Americans across many programs. “From day one of my administration, I promised to fight to ensure that higher education is a ticket to the middle class, not a barrier to opportunity,” President Biden said in a statement. ”
I will never stop working to cancel student debt — no matter how many times Republican-elected officials try to stop us.” The latest relief will go to borrowers in three groups who have reached specified milestones that qualify them for cancelation. It will go to 54,000 borrowers enrolled in Biden’s new income-driven repayment plan, as well as 39,000 engaged in previous income-driven programs and around 67,000 who are qualified under the Public Service Loan Forgiveness program.
Biden’s new payment plan, the SAVE Plan, provides a faster road to forgiveness than previous versions. More people are now eligible for debt cancellation once they reach ten years of payments, a new finish line that comes a decade earlier than what borrowers faced previously. The cancellation is proceeding despite Biden’s SAVE Plan facing legal challenges from Republican-led states. In March, a group of 11 states led by Kansas filed a lawsuit to halt the proposal, followed by seven more led by Missouri in April. In two federal lawsuits, the states argue that Biden’s revamp of federal repayment arrangements required congressional approval.
The Biden administration took a separate action to correct previous mistakes that had delayed cancellation for some borrowers enrolled in other repayment plans, as well as through Public Service Loan Forgiveness, which forgives loans for people who make ten years of payments while working in public service jobs.
Each month, the Biden administration announces new batches of forgiveness as more people meet the criteria for those three categories.
According to the Education Department, one in every ten federal student loan debtors has been accepted for some type of financial relief. “One out of every 10 federal student loan borrowers approved for debt relief means one out of every ten borrowers now has financial breathing room and a burden lifted,” Education Secretary Miguel Cardona said in a statement.
The Biden administration has continued to cancel loans through existing channels while advocating for a new, one-time cancellation that would benefit more than 30 million borrowers across five categories.
Biden’s new plan intends to assist borrowers with substantial amounts of unpaid interest, those with older loans, those who attended low-cost college programs, and those who have additional challenges that prevent them from repaying student loans. It would also rescind loans for those who are eligible under other schemes but have not applied.
The proposal is going through a lengthy regulation process, but the administration has stated that it will expedite certain elements, with intentions to waive unpaid interest for millions of borrowers beginning this fall. Conservative opponents have also threatened to contest that plan, calling it an unjust incentive for wealthy college graduates at the expense of taxpayers who did not attend college or have already paid off their loans.
The Supreme Court rejected Biden’s previous attempt at a one-time revocation, claiming it exceeded the president’s jurisdiction. The new proposal is being developed under a different legal justification.