December 7, 2023
Biden Approves $5 Billion More Toward Student Loan Debt
This move extends the total relief offered to over 3.6 million borrowers for a total of $132 billion.
CNN reports that the Biden administration is tackling the student loan crisis by greenlighting an additional $5 billion in federal student loan debt cancellation.
This move extends the total relief offered to $132 billion for more than 3.6 million borrowers. Although Biden’s prominent student loan forgiveness program, which aimed to grant up to $20,000 in debt relief to low- and middle-income borrowers, was struck down by the Supreme Court, the administration is unwavering in its dedication to exploring alternative avenues for debt relief.
“We are continuing to pursue an alternative path to deliver student debt relief to as many borrowers as possible as quickly as possible,” Biden said in a release.
The latest round of debt cancellations was made possible through existing federal student loan forgiveness programs, catering to specific categories of borrowers. These include public-sector workers qualifying under the Public Service Loan Forgiveness program, which erases remaining student loan debt after a decade of qualifying monthly payments. Another category includes borrowers who have made at least 20 years of qualifying payments in an income-driven repayment program but didn’t receive credit for all their previous payments.
“The latest discharges are a result of this administration’s relentless efforts to fix our country’s broken student loan system and get hard-earned debt relief into the hands of eligible borrowers,” Education Secretary Miguel Cardona said
The one-time recount of past payments, initiated by the Biden administration to rectify past administrative failures, has been a significant factor in providing debt relief. Borrowers enrolled in income-driven repayment plans, available since 1993, have benefited from adjustments to their accounts. However, the administration faces challenges, with some Republican lawmakers and conservative groups questioning the authority to recount payments, leading to legal challenges.
In addition to debt cancellation, the Biden administration has taken steps to ease the burden on borrowers as federal student loan payments resumed in October. The introduction of the SAVE (Saving on a Valuable Education) repayment plan and a 12-month on-ramp period aim to provide relief and shield borrowers from severe consequences during the transition.