The Biden administration has declared the cancellation of $7.7 billion in student loans, benefiting 160,000 borrowers. This move is part of a broader effort that has already seen $167 billion in debt relief for nearly 5 million Americans.
President Joe Biden reaffirmed his commitment, stating, “I promised to fight to ensure higher education is a ticket to the middle class, not a barrier to opportunity. I will never stop working to cancel student debt.”
The relief targets three groups: 54,000 under the new income-driven repayment plan, 39,000 under previous plans, and 67,000 public servants. The new SAVE Plan expedites forgiveness, setting a 10-year payment milestone for eligibility.
Despite facing legal challenges from Republican states, the administration is correcting past errors to facilitate cancellations for those in public service roles and other repayment plans. Education Secretary Miguel Cardona highlighted the impact, saying, “One out of every 10 federal student loan borrowers approved for debt relief means one out of every 10 borrowers now has financial breathing room and a burden lifted.”
The administration continues to pursue a one-time cancellation strategy, potentially aiding over 30 million borrowers. This includes those with significant unpaid interest, older loans, or attendance in low-value programs, and others facing repayment hardships.
While the proposal undergoes a rulemaking process, provisions to waive unpaid interest are set to begin this fall. However, conservative critics argue it favors wealthy graduates unfairly and may challenge the plan legally. The Supreme Court previously ruled against Biden’s cancellation attempt, but the administration is proceeding with a different legal rationale.
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