The Biden administration has announced the cancellation of student loans for an additional 160,000 borrowers, totaling $7.7 billion in federal student debt. This move is part of the administration’s effort to alleviate the financial burden on Americans struggling with student loans. President Biden has emphasized his commitment to making higher education more accessible and ensuring that student debt is not a barrier to opportunity. This latest round of loan forgiveness comes as part of existing programs that have already canceled $167 billion in student debt for nearly 5 million borrowers.
The loan cancellation will benefit borrowers in three categories, including those enrolled in Biden’s new income-driven repayment plan, earlier income-driven plans, and the Public Service Loan Forgiveness program. Biden’s new payment plan, known as the SAVE Plan, provides a faster path to loan forgiveness, allowing more borrowers to qualify after 10 years of payments. This is a significant change from previous repayment plans that required a longer repayment period. Despite legal challenges from Republican-led states, the administration is moving forward with the loan cancellation, aiming to provide relief to those who qualify under the specified categories.
In addition to the ongoing loan forgiveness through existing programs, the Biden administration is also pushing for a new, one-time cancellation plan that could benefit more than 30 million borrowers in various categories. This new plan is designed to assist borrowers with large amounts of unpaid interest, older loans, attendance at low-value college programs, and other hardships that hinder loan repayment. It also aims to help those who are eligible through other programs but have not applied for loan forgiveness. The administration plans to accelerate certain provisions of the new plan, including waiving unpaid interest for millions of borrowers starting in the fall.
Conservative opponents have raised concerns about the new loan cancellation plan, arguing that it could unfairly benefit wealthy college graduates at the expense of taxpayers who did not attend college or have already repaid their loans. The Supreme Court previously rejected Biden’s attempt at one-time loan cancellation, citing concerns about the president’s authority. The administration is now proceeding with a different legal justification for the new plan, as it works to provide relief to millions of borrowers facing financial hardship due to student loans. Despite challenges, the administration remains committed to its goal of making higher education more accessible and alleviating the burden of student debt for Americans.
