PHIADELPHIA, PA - In a move that has sent shockwaves through the student loan landscape, the Biden administration announced on May 22, 2024, the cancellation of $7.7 billion in federal student loans for 160,000 borrowers. This decision, part of a series of initiatives to alleviate the burden of student debt, has been met with praise and criticism.
Under President Joe Biden's guidance, The Department of Education has used a combination of existing programs to effect this significant debt cancellation. This includes the Public Service Loan Forgiveness program, which has seen $5.2 billion forgiven for nearly 67,000 borrowers. Additionally, over 54,000 borrowers enrolled in the SAVE Plan, designed to peg a borrower's monthly payment to their income, will see $613 million in relief. The remaining $1.9 billion will be forgiven for more than 39,000 borrowers through administrative adjustments to income-driven repayment counts.
This latest round of cancellations brings the total number of Americans who have had loans canceled to 4.75 million, relieving an average of over $35,000 per borrower. This is a significant step towards fulfilling President Biden's promise to ensure higher education is a ticket to the middle class, not a barrier to opportunity.
However, the move has not been without its critics. Republicans have accused the administration of transferring the burden to taxpayers and undermining the Supreme Court, which had previously blocked the White House's student loan forgiveness plan. Despite this, the Biden administration has continued to work towards providing relief to those burdened by student debt.
In addition to this latest round of cancellations, the administration is working on new proposals to relieve specific groups of borrowers. Based on a different legal authority, these proposals are currently going through a lengthy rulemaking process. The administration has also announced plans to waive unpaid interest for millions of borrowers beginning this fall.
As the November election looms, the Biden administration's focus on student loan debt relief will likely remain a vital issue. Canceling $7.7 billion in student loans is a significant step towards addressing the soaring college debt that has become a primary concern for many Americans. It remains to be seen how this move will impact the political landscape and the lives of the borrowers who have been granted this relief.
