The Biden administration announced that it will forgive $7.7 billion in student loans for more than 160,000 borrowers as part of its efforts to alleviate the burden of education debt. This relief comes as a result of the U.S. Department of Education’s enhancements to its income-driven repayment plans and Public Service Loan Forgiveness program. Education Secretary Miguel Cardona expressed the administration’s commitment to bringing student debt relief to millions more across the country.
The loan forgiveness includes $5.2 billion for 66,900 borrowers pursuing Public Service Loan Forgiveness, $1.9 billion for 39,200 individuals enrolled in income-driven repayment plans, and $613 million for 54,300 borrowers under the new income-driven repayment option called the Saving on a Valuable Education (SAVE) plan. The SAVE plan provides for student loan forgiveness after 10 years for those who borrowed $12,000 or less. This initiative is part of the government’s efforts to make existing loan forgiveness options more accessible to borrowers.
Following the Supreme Court’s rejection of President Joe Biden’s broad student debt cancellation proposal last year, the administration has turned to existing authority to reduce borrower balances. By expanding the reach of and making improvements to these programs, the Biden administration has forgiven the debt of 4.75 million borrowers, totaling $167 billion in aid. These measures aim to address the challenges that many borrowers faced in navigating the loan forgiveness options in the past.
Many borrowers found the existing loan forgiveness programs to be difficult to navigate, leading to complaints about not receiving the relief they were entitled to, according to consumer advocates. One common issue was the lack of proper accounting of borrowers’ timelines for loan erasure under income-driven repayment plans. In response to these challenges, the Education Department committed to reviewing accounts in 2022 to ensure that borrowers receive the relief they deserve. The administration’s efforts have sought to streamline the loan forgiveness process and make it more accessible to those in need.
Overall, the Biden administration’s strategy to forgive student loans has resulted in significant relief for millions of borrowers across the country. By leveraging the Education Department’s loan forgiveness options and making enhancements to these programs, the administration has been able to provide substantial aid to individuals struggling with education debt. Moving forward, the focus remains on expanding access to loan forgiveness and ensuring that borrowers receive the relief they are entitled to under these programs.
