Biden administration canceling student loans for another 160K borrowers

“I promised to fight to ensure higher education is a ticket to the middle class, not a barrier to opportunity,” Biden said in a statement Wednesday. “I will never stop working to cancel student debt — no matter how many times Republican elected officials try to stop us.”
With the election months away, President Biden is lauding his administration’s achievements in delivering loan cancellation to nearly 4.8 million people through a mix of existing programs and new policies. Republicans have remained staunchly opposed to the effort, decrying it as a waste of taxpayers’ money and patently unfair to Americans who never went to college.
More than 160,000 student loan borrowers are now in line to have their balances canceled, bringing the total amount of debt forgiveness allowed under the Biden administration’s relief policies to $167 billion, the Education Department announced Wednesday.
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The largest portion of the new $7.7 billion in relief will go to 66,900 public servants who benefit from the Public Service Loan Forgiveness program, which erases the balances of people who spend 10 years repaying their loans while in a government or nonprofit job. By temporarily relaxing the complex rules of the program in 2022, the Biden administration gave hundreds of thousands of borrowers an easier path to loan forgiveness.
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An additional 54,300 borrowers enrolled in Biden’s Saving on a Valuable Education (Save) repayment plan, which ties monthly student loan payments to earnings and family size, will also have their balances wiped clear. Enrollees who borrowed less than $12,000 can have their debt forgiven after 10 years of payments, compared with the traditional wait period of 20 to 25 years under other income-driven repayment plans.
The remaining debt relief will go to 39,200 borrowers who have been in repayment on their loans for more than 20 or 25 years. Those borrowers are benefiting from a temporary waiver of the rules governing income-driven repayment plans, known as the IDR adjustment. The waiver grants longtime borrowers credit toward loan forgiveness to rectify inconsistencies in how student loan servicers have treated and tracked payments. This month, the administration said it would give borrowers with older bank-based federal loans more time to consolidate to take advantage of the adjustment.
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“One out of every 10 federal student loan borrowers approved for debt relief means one out of every 10 borrowers now has financial breathing room and a burden lifted,” Education Secretary Miguel Cardona said in a statement Wednesday.
Biden’s loan forgiveness policies continue to raise the ire of conservatives. Republican attorneys general filed two lawsuits seeking to overturn the Save repayment plan, accusing Biden of trying to provide sweeping debt cancellation despite the Supreme Court ruling against a similar policy last year. A group of congressional Republicans on Friday wrote Cardona urging him to withdraw a pending regulation to forgive some or all student loans for more than 30 million Americans, calling it a “reckless” wealth transfer.
Elaine Parker, president of the conservative Job Creators Network Foundation, on Wednesday said the latest round of loan cancellation is also “lawless and defies the Supreme Court and Congress.”
“It is merely a vote-buying exercise,” said Parker, whose foundation was among the groups that sued in 2022 to block Biden’s plan to forgive up to $20,000 in student loans for some borrowers. “Taxpayer forgiveness of college debt only exacerbates the student loan crisis by giving colleges a blank check to continue overcharging students.”
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The Biden administration is adamant that student loan cancellation benefits the broader economy. A Council of Economic Advisers report released in April found that student loan discharges and other actions taken by the administration could boost short-term consumption, homeownership, and entrepreneurship.