Biden Administration Cancels Student Loans for 160,000 Borrowers

The U.S. Department of Education announced on Wednesday, May 23, that it will cancel $7.7 billion in federal student loans for 160,000 borrowers through a combination of existing programs. With this action, nearly 5 million Americans will have been relieved of $167 billion in federal debt due to Biden's administration efforts so far. President Joe Biden stated, "From day one of my administration, I promised to fight to ensure that higher education is an opportunity for the middle class, not a barrier to opportunity. No matter how much Republican elected officials try to stop us, I will never stop fighting to cancel student debt." The recent action will eliminate loans for three categories of borrowers: 54,000 borrowers who have registered for Biden's new income-driven plan, 39,000 who are enrolled in previous income-driven plans, and about 67,000 who qualify for loan forgiveness due to public service. Biden's new plan, called 'SAVE,' provides a faster route to forgiveness compared to previous plans, allowing more borrowers to qualify for forgiveness after ten years of repayment. Even as the 'SAVE' plan faces legal challenges from Republican states, the forgiveness is ongoing. A group of 11 states led by Kansas filed a complaint in April, and a group of 9 states led by Missouri filed a complaint in May regarding Biden's plan, arguing that he needs congressional approval to revise federal repayment programs. In another action, the Biden administration is working to correct past mistakes in canceling debt for some borrowers who had registered for other repayment and public service forgiveness plans; this includes those who have worked in the public sector and have made ten years of payments on their loans. The Biden administration announces new segments of forgiveness each month as more individuals from these three categories become eligible. Education Secretary Miguel Cardona states that so far, one in ten borrowers has been accepted for some type of loan relief, "which means that among every ten borrowers, one now has financial opportunity and a burden lifted off their shoulders." The Biden administration has sought various ways to cancel student loans and is also pursuing a one-time cancellation of student loans for over 30 million borrowers in five different groups. The goal of this new plan is to assist borrowers with high unpaid interest amounts, recipients of old loans, participants in low-value academic programs, and those who cannot repay their loans for other reasons. It also includes individuals who are eligible through other programs but have not applied for forgiveness. The Supreme Court rejected Biden's previous attempt for a one-time cancellation, stating that the action exceeded the legal authority of the President, but the new plan for one-time cancellation is being pursued with a different legal justification.