The Biden Administration has unveiled a new plan to forgive a staggering $9 billion in student loans. In total, President Joe Biden has now forgiven an astounding $127 billion in student loan debt for 3.6 million individuals across the United States. However, it’s crucial to note that some of his previous debt forgiveness plans faced legal challenges, with the Supreme Court rejecting a large-scale plan earlier this year.
The President has always believed that higher education should be a pathway to the middle class, not a financial burden on families,” stated the White House on October 4. “From day one, his Administration has taken unprecedented steps to reform the flawed student loan system, make college more affordable, and ensure that higher education is within reach for more Americans.”
The newly announced student loan debt forgiveness initiative aims to eliminate $9 billion in debt for 125,000 Americans. This will be achieved through adjustments to income-driven repayment (IDR) programs and the Public Service Loan Forgiveness program.
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Under the Public Service Loan Forgiveness program, 53,000 individuals with a total of $5.2 billion in student loan debt have yet to see their balances cleared. This program was designed to forgive student loans for those working in public service after they have completed 10 years of service and made 120 qualifying payments.
Furthermore, 51,000 borrowers who have diligently made “20 years or more of payments” on their student loans but have not received other forms of forgiveness will collectively see $2.8 billion of debt forgiven through IDRs. Additionally, 22,000 borrowers identified as having total or permanent disabilities, and approved for discharge through a data match with the Social Security Administration, will have $1.2 billion in debt forgiven.
It’s important to note that student loan payments, which were paused during the COVID-19 pandemic, resumed on October 1 after a three-year hiatus. Interest on these loans began accruing again on September 1.
President Biden, who made student loan debt forgiveness a central promise of his campaign, has introduced multiple initiatives to alleviate borrowers’ debts since taking office. Notably, in June, the Supreme Court rejected the administration’s proposal to forgive up to $20,000 in debt for low-income students who were Pell Grant recipients, along with up to $10,000 for other groups of borrowers. Estimates suggested this plan would have canceled a staggering $430 billion in federal student loan debt. The Supreme Court determined that the administration had misapplied the law and that the Department of Education lacked the authority to cancel the debt.
As the 2024 presidential election looms, student loan debt is expected to remain a prominent issue. President Biden is actively seeking to garner support from liberal voters by promising further debt cancellation measures.
