The Biden administration recently announced that it would forgive $7.7 billion in student loans for over 160,000 borrowers, as part of its ongoing efforts to alleviate the burden of education debt on households. This relief is made possible by the U.S. Department of Education’s enhancements to its income-driven repayment plans and Public Service Loan Forgiveness program. Education Secretary Miguel Cardona expressed the administration’s commitment to providing student debt relief to millions of borrowers across the country.
The loan forgiveness announced on Wednesday includes $5.2 billion for 66,900 borrowers pursuing Public Service Loan Forgiveness, and $1.9 billion for 39,200 individuals enrolled in income-driven repayment plans. Additionally, $613 million will be allocated to 54,300 borrowers under the Biden administration’s new income-driven repayment option, the Saving on a Valuable Education (SAVE) plan, which leads to loan forgiveness after 10 years for those who originally borrowed $12,000 or less. This latest round of relief brings the total amount forgiven by the Biden administration to $167 billion, benefiting 4.75 million borrowers.
After President Joe Biden’s broad student debt cancellation plan was struck down by the Supreme Court last summer, the White House has been exploring alternative ways to help borrowers reduce their balances. One area where they have found success is the Education Department’s existing loan forgiveness programs, which were previously difficult for borrowers to access. By expanding the reach of these programs and addressing issues that hindered borrowers from receiving their entitled relief, the administration has been able to provide substantial aid to millions of borrowers.
Consumer advocates point out that historically, borrowers struggled to navigate these loan forgiveness options and often did not receive the relief they were eligible for. For example, income-driven repayment plans were designed to forgive loans after a certain period, but the Education Department often did not accurately track borrowers’ timelines, leading to delays in forgiveness. In response to these challenges, the department announced in 2022 that it would review borrowers’ accounts to ensure they receive the relief they are entitled to.
The Biden administration’s initiative to forgive student loans has been instrumental in helping millions of borrowers manage their education debt and access crucial relief. By enhancing existing loan forgiveness programs and creating new options like the SAVE plan, the administration is making a meaningful impact on the financial well-being of borrowers across the country. Moving forward, the administration continues to prioritize student debt relief as a key component of its efforts to address economic disparities and support households struggling with the financial challenges of higher education.
