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Biden Administration Announces New Wave of Student Loan Cancellations for 160,000 Borrowers; Students Sigh in Relief

Biden Administration Announces New Wave of Student Loan Cancellations for 160,000 Borrowers; Students Sigh in Relief

The Biden administration has announced the cancellation of student loans for an additional 160,000 borrowers, utilizing a combination of existing programs.

The Education Department made a recent announcement on Wednesday, revealing its plan to eliminate $7.7 billion in federal student loans. The administration has announced the cancellation of $167 billion in student debt for nearly 5 million Americans through various programs.

“Since the beginning of my administration, I have been committed to ensuring that higher education serves as a pathway to the middle class, rather than a hindrance to opportunity,” stated President Joe Biden. “I am committed to relentlessly pursuing the cancellation of student debt, regardless of the opposition from Republican-elected officials.”

Borrowers in three specific categories will now receive the latest relief, as they have met certain milestones that qualify them for cancellation.

A total of 54,000 borrowers who are enrolled in Biden’s new income-driven repayment plan, along with 39,000 enrolled in earlier income-driven plans, and approximately 67,000 who are eligible through the Public Service Loan Forgiveness program will receive it.

Biden’s latest payment plan, called the SAVE Plan, provides a more expedited route to forgiveness compared to previous iterations. Loan cancellation eligibility has expanded, allowing more individuals to qualify after reaching 10 years of payments. This new finish line is a decade earlier than previous borrowers had to contend with.

Despite facing legal challenges from Republican-led states, the cancellation is still moving forward amidst Biden’s SAVE Plan. In March, a group of 11 states filed a lawsuit to block the plan, which was later followed by seven more states in April.

Two federal lawsuits have been filed by the states, arguing that Biden should have obtained approval from Congress for his extensive changes to federal repayment plans.

The Biden administration took additional steps to rectify past errors that caused delays in loan cancellation for certain borrowers who were enrolled in alternative repayment plans and the Public Service Loan Forgiveness program. This program forgives loans for individuals who have made 10 years of payments while working in public service positions.

The Biden administration has been regularly announcing additional rounds of forgiveness on a monthly basis, as an increasing number of individuals meet the criteria in these three categories.

The Biden administration is actively working to provide relief to over 30 million borrowers in five categories by canceling loans through existing avenues and advocating for a new, one-time cancellation.

Biden’s latest initiative seeks to provide assistance to individuals burdened by substantial amounts of unpaid interest, individuals with older loans, individuals who attended low-value college programs, and those facing various hardships that hinder their ability to repay student loans.

In addition, loans for eligible individuals who have not yet applied through other programs would be canceled.

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