In a bid to address the mounting burden of student loan debt on Americans, President Joe Biden declared on Friday that an additional $5 billion in relief would be extended to 74,000 qualifying borrowers under existing federal programs, as reported by the New York Post on January 19, 2024.
This move marks the latest endeavor by the Biden administration to alleviate the financial strain on student loan borrowers, following the Supreme Court’s rejection of his ambitious plan to cancel $430 billion in student debt last year.
The newly announced forgiveness initiative is set to benefit 44,000 public service workers, including educators, healthcare professionals, and firefighters, who have diligently made a decade’s worth of payments on their federal loans. This program, established by former President George W. Bush in 2007, aims to recognize and reward the commitment of those serving in critical roles within the community.
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An additional 30,000 borrowers are slated to have their debts expunged due to their enrollment in income-driven repayment plans spanning two decades. These plans cap monthly payments at a percentage of the borrower’s income and enjoy bipartisan support, being authorized by existing laws.
“I won’t back down from using every tool at our disposal to get student loan borrowers the relief they need to reach their dreams,” President Biden asserted in a statement. “These actions will provide much-needed relief to millions of Americans who are struggling under the weight of student debt.”
The announcement comes against the backdrop of President Biden facing mounting pressure from progressive activists and lawmakers to fulfill his campaign promise of canceling $10,000 or $20,000 in student debt per borrower. This promise was initially made in response to the economic challenges posed by the COVID-19 pandemic.
However, the Supreme Court ruled in June that the President lacked the legal authority to execute such a plan via executive action, dealing a significant blow to Biden’s agenda and prompting a shift to a more targeted, program-specific approach.
President Biden has, since then, employed a piecemeal strategy to address student debt, leveraging existing programs to provide relief to specific groups, including disabled veterans, defrauded students, and public service workers.
A Wall Street Journal analysis indicates that approximately $137 billion in student debt has been forgiven for around 3.5 million borrowers since the court’s ruling. Despite these efforts, they have fallen short of meeting the demands of the broader student debt cancellation movement, which argues that the $1.7 trillion outstanding federal student debt is a crisis affecting 45 million Americans, hindering their economic opportunities and well-being.
While expressing support for canceling $10,000 in student debt per borrower, President Biden has emphasized his preference for Congress to pass legislation to enact such measures. He has also tasked the Education Department with reviewing his executive authority to cancel student debt, although the findings are yet to be released.
The President’s latest announcement is poised to bring relief to the 74,000 borrowers whose debts will be erased. However, it remains to be seen whether this move will be sufficient to address the concerns of both critics and supporters eagerly awaiting substantial and widespread student debt relief.
