The Biden administration has announced the cancellation of $7.4 billion in student debt for 277,000 borrowers, marking the latest effort to provide relief to borrowers with a combined $1.7 trillion in student debt. This extends the debt relief provided under President Joe Biden, who has already forgiven $153 billion for 4.3 million borrowers. The issue of student loan debt has been highlighted as a burden that affects the financial well-being of millions of Americans, preventing them from saving for homes or achieving financial milestones. Education Secretary Miguel Cardona emphasized the need to address the broken system and transform it to benefit people across the country.
The latest round of student loan forgiveness targets three groups of borrowers. The first group, consisting of nearly 207,000 borrowers enrolled in the Saving on a Valuable Education (SAVE) plan, will have $3.6 billion forgiven. Borrowers who originally took out $12,000 or less in loans for college studies are eligible for forgiveness after making at least 10 years of payments. The second group, comprising 65,700 borrowers in income-repayment plans, will receive forgiveness through administrative adjustments to repayment plans. Lastly, $300 million will be forgiven for 4,600 borrowers through the Public Service Loan Forgiveness (PSLF) program, designed to help public servants like teachers and government employees achieve debt forgiveness after 10 years of repayment.
There have been legal challenges to Biden’s debt forgiveness plans, with Republican attorneys general in 18 states filing lawsuits to have the SAVE plan overturned and halt further student debt cancellation. They argue that the plan oversteps Biden’s authority, makes it harder for states to recruit employees, and undermines a separate cancellation program that encourages careers in public service. However, it is unclear what impact these lawsuits will have on loans that have already been cancelled. Despite these legal challenges, the Biden administration is continuing its efforts to provide relief to student loan borrowers who have been struggling with debt burdens.
Education Secretary Miguel Cardona highlighted the impact of student loan debt on borrowers, sharing the story of a teacher in New York who saw her debt double to $60,000 after over a decade of payments. He emphasized the need to fix a broken system and transform it into one that works for people across the country. The Biden administration has made student loan relief a priority, fulfilling a campaign pledge to address the issue that affects approximately 43 million Americans. By providing debt relief to millions of borrowers, the administration aims to alleviate the financial strain faced by many individuals and help them achieve economic stability.
