Biden Administration Cancels $7.4 Billion in Student Debt for 277,000 Borrowers

• Author: Alicia Cole
• Posted: 2024-09-23

In a significant expansion of student loan forgiveness, the Biden administration has announced the cancellation of approximately $7.4 billion in federal student debt for 277,000 borrowers. This effort notably emphasizes President Joe Biden's commitment to relieving the financial burden on students through existing loan forgiveness programs.

Under President Biden's tenure, the Department of Education has pursued the enhancement of loan forgiveness accessibility, particularly for public sector employees, and introduced a new repayment mechanism known as SAVE (Saving on a Valuable Education), providing low-income borrowers a swifter road to forgiveness. These efforts proceed despite pending legal challenges from Republican-led states.

To date, these forgiveness actions signal the administration's total loan cancellation reaches an extraordinary $153 billion for nearly 4.3 million borrowers, representing over 9% of the $1.6 trillion total federal student loan debt reduction.

With the midterm elections approaching, the administration is actively displaying its dedication to student loan debt mitigation. The release of regular announcements on debt relief and direct outreach to eligible borrowers reflect Biden's proactive stance on educational assistance policies.

The move, however, has not escaped criticism. Republicans argue that loan cancellations levy an unfair burden on taxpayers, including those who avoided college debt or have settled their loans. They state Biden is bypassing Congress, and point to the Supreme Court's block of a wider loan forgiveness plan from the previous year.

The SAVE plan accounts for about $3.6 billion of the most recently announced relief and has enrolled nearly 8 million borrowers so far, with around 360,000 having had their debts canceled.

White House press secretary Karine Jean-Pierre has hit back at the Republican opposition to the SAVE plan, accusing them of depriving constituents from the promised debt relief.

SAVE proposes substantial revisions to previous income-driven repayment plans. Upon full introduction in July, eligible borrowers might see payments reduced by half. Notably, borrowers with original loan amounts of $12,000

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Related Reading: Student Loans: Unlocking the Key to Financial Freedom and Academic Success