May 24th 2024.
President Joe Biden has made an exciting announcement that will bring much-needed relief to thousands of student borrowers. Through a collaborative effort of existing programs, a new round of loan debt cancellation has been approved for 160,000 individuals. The Department of Education revealed that this latest round will eliminate a staggering $7.7 billion in federal student loans, bringing the total amount of debt cancelled by the Biden administration to an impressive $167 billion for nearly five million Americans.
This move by the Biden administration is a testament to their commitment to making higher education accessible to all and ensuring that it is not a barrier to success. As President Biden himself stated, "From day one of my administration, I promised to fight to ensure higher education is a ticket to the middle class, not a barrier to opportunity." He also made it clear that he will not give up on his mission to cancel student debt, no matter how many times Republican-elected officials try to block their efforts.
The latest round of debt cancellation is targeted towards three specific groups who have met certain eligibility milestones. This includes 54,000 borrowers who have enrolled in the new income-driven repayment plan, 39,000 who were already enrolled in earlier income-driven plans, and 67,000 who are part of the Public Service Loan Forgiveness program. This means that a wide range of individuals, including public service workers like teachers, nurses, and law enforcement officials, will be able to benefit from this latest round of debt relief.
One of the most significant changes in this new round of loan forgiveness is the implementation of the SAVE Plan. This plan offers a quicker pathway to loan forgiveness compared to previous versions. Instead of having to make payments for 20 or 25 years, borrowers will now become eligible for loan cancellation after just ten years. This is a significant reduction and will provide much-needed relief to those struggling with student loan debt. The plan also aims to assist borrowers who have large amounts of unpaid interest, those with older loans, and individuals who have attended low-value college programs. It also takes into account those facing hardships that make it difficult for them to make their loan payments.
Despite facing legal challenges from GOP-led states, the Biden administration remains committed to their efforts to provide relief to student borrowers. The state of Kansas is leading a group of 11 conservative-led states in a lawsuit that was filed back in March 2024. In April, seven more states, led by Missouri, also issued a lawsuit. Both lawsuits claim that President Biden should have gone through Congress for his federal repayment plans. However, Education Secretary Miguel Cardona remains confident in their actions, stating that their efforts have been "persistent" and "proven." He also highlighted the positive impact that this debt cancellation will have on individuals, stating that "One out of every ten federal student loan borrowers approved for debt relief means one out of every ten borrowers now has financial breathing room and a burden lifted."
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