The Biden administration on Wednesday morning announced a massive new student loan benefit that will put $7.7 billion toward debt consolidation for more than 160,000 borrowers.
The latest distribution focuses on three categories of borrowers: those receiving Public Service Loan Forgiveness (PSLF), those who are enrolled in President Biden’s Savings for Valuable Education (SAVE) Plan and qualify for accelerated benefits to forgiveness, and those who are receiving income-driven repayment (IDR) forgiveness as a result of government modifications.
This includes $5.2 billion to 66,900 borrowers through modifications to PSLF and 54,300 borrowers enrolled in the SAVE Plan who received small loans for higher education through the SAVE Plan. This includes $613 million for 39,200 borrowers and $1.9 billion through administrative adjustments to IDRs. The Department of Education stated the number of payments in a press release.
As of Wednesday’s announcement, the Biden administration has canceled $167 billion in student loan debt for 4.75 million Americans, according to the DOE.
“The Biden-Harris Administration remains steadfast in our commitment to providing student debt relief to millions more across the country, and today’s announcement proves that,” Education Secretary Miguel Cardona said in a statement. “One in 10 federal student loan borrowers approved for debt relief means one in 10 borrowers can now afford it and have a lighter burden.”
The DOE also issued an update on the timing of the payment frequency adjustment, saying the amendment will ensure that borrowers receive IDR forgiveness and credit for progress toward PSLF. Borrowers now have until June 30 to apply for consolidation.
“An additional 160,000 borrowers and their families will receive much-needed relief thanks to our continued efforts. [of] “The Biden-Harris Administration is committed to repairing our broken student loan system,” Under Secretary of Education James Kvall said in a statement. “We congratulate these borrowers on receiving the forgiveness they rightfully deserve and will continue to work to provide relief to other borrowers.”
The Biden administration has taken several steps to eliminate student debt, including increasing the Pell Grant limit by $900 and “leaving graduates with unaffordable debt or insufficient income.” These include finalizing new rules to protect borrowers from “career programs.”
“Today’s announcement builds on the tremendous progress we’ve made over the past three years for students and borrowers,” Biden said in a statement.
“This includes the largest increase in Pell Grants in more than a decade. Public Service Loan funding to ensure that teachers, nurses, police officers, and other public servants receive the relief they are entitled to by law. Fix the forgiveness system. And hold universities accountable for taking advantage of students and families. And last month, all I’ve done is cancel the student loans of more than 30 million Americans. announced the administration’s new plan to
“From day one in office, I pledged to fight to ensure higher education is a ticket to the middle class, not a barrier to opportunity,” he continued. “No matter how many times Republicans try to stop us, I will never stop working to cancel student debt.”
In addition to the loans cleared under IDR, SAVE Plans, and PSLF, the Biden administration also has 1.6 million loans that were “defrauded by schools, whose schools closed abruptly, or were subject to related court settlements.” Approved $28.7 billion to more than 1,000 borrowers. ” and $14.1 billion to more than 548,000 borrowers with total and permanent disabilities.
The Supreme Court ruled last year that the Biden administration overstepped its authority when it announced it would cancel up to $400 billion in student loan debt in 2022.
Biden has since launched new efforts to cancel student loan debt, but Republican-leaning states have filed lawsuits challenging those efforts.
