President Biden announced Wednesday that he would forgive $7.7 billion in student loans owed by 160,000 borrowers. His strategy is to chip away at college debt by tweaking the existing system as the administration moves forward with a larger forgiveness plan.
The Department of Education said in a statement that many of the borrowers in this round, who qualified through Public Service Loan Forgiveness, the President's SAVE Plan, or another income-based repayment plan, have already received emails notifying them of their approval. He said he is starting.
A series of loan forgiveness announcements from the White House this year have been a centerpiece of Mr. Biden's re-election campaign, and he has consistently said that overcoming education costs is the biggest challenge for working families. It has been emphasized that this is an obstacle.
“From day one in office, I promised to fight to make higher education a ticket to the middle class, not a barrier to opportunity,” the president said in a statement.
The announcement marks another small step forward on a problem that has long vexed the president. Although he has canceled more student loans than his predecessor, he has fallen far short of the massive debt relief he promised, and many younger voters who overwhelmingly supported him in 2020 have shown signs of turning away. disappointed.
The Biden administration has now canceled about $167 billion in loans to 4.75 million borrowers, or about 1 in 10 federal loan holders, and canceled an average of $35,000 in debt. The president has a larger goal of forgiving debt for nearly 30 million borrowers as early as this fall. But the broader program is still being finalized and, like Biden's first attempt at mass debt cancellation, could fall victim to legal challenges.
Of the total amount announced Wednesday, $5.2 billion in forgiveness was given to about 66,900 borrowers who qualified through adjustments the Department of Education made to the Public Service Loan Forgiveness Program. Help teachers, firefighters, and other government and nonprofit workers.
About $600 million in relief will go to about 54,300 borrowers who took out small loans for graduate school and are enrolled in the SAVE plan, which links monthly payments to income and household size. All borrowers enrolled in the plan can qualify for forgiveness after up to 25 years, but borrowers who took out loans of $12,000 or less can qualify after 10 years of making payments.
An additional 39,200 borrowers enrolled in other income-driven repayment plans also received $1.9 billion in forgiveness through “administrative adjustments” to the number of payments they are required to make. The ministry said these adjustments are primarily to correct the abuse of moratoriums by certain debt collection companies.
The department is also focusing on other ways to extend debt forgiveness, such as repaying loans held by students found to have been defrauded by their schools. Just this month, for example, the department waived federal loans for 317,000 students attending art schools.
An even bigger part of the strategy is to forgive runaway interest on loans that have ballooned far beyond the original amount borrowed, which is still pending as the administration works to approve new rules. . The administration said more than 25 million people could be eligible for relief under these regulations.
A public comment period on parts of the plan ended Friday, with the proposal receiving more than 65,000 comments.
