22dc Studentloans Fwvk Facebookjumbo.jpg

Biden Administration Cancels Another $7.7 Billion in Student Loans

President Biden announced on Wednesday the cancellation of $7.7 billion in student loans held by 160,000 borrowers, building on his strategy of chipping away at college debt by tweaking existing programs as his administration pursues a larger forgiveness plan.

Many borrowers in this round — who qualified through public service loan forgiveness, the president’s SAVE plan or another income-driven repayment plan — have already begun receiving emails notifying them of their approvals, the Education Department said in a statement.

The steady drumbeat of loan forgiveness announcements from the White House this year has become a centerpiece of Mr. Biden’s re-election pitch, in which he has consistently described overcoming the cost of education as a primary hurdle for working families.

“From Day 1 of my administration, I promised to fight to ensure higher education is a ticket to the middle class, not a barrier to opportunity,” the president said in a statement.

The announcement marks another small step forward on an issue that has long bedeviled the president. Even as he has canceled more student debt than has any of his predecessors, he has fallen far short of the mass debt forgiveness he promised, disappointing many of the younger voters who overwhelmingly supported him in 2020 but have shown signs of drifting away.

The Biden administration has now canceled about $167 billion in loans for 4.75 million borrowers, or roughly one in 10 federal loan holders, wiping away $35,000 in debt on average. The president has set forward a much larger goal: forgiving debt for nearly 30 million borrowers as soon as this fall. But the broader program is still being finalized and could fall victim to legal challenges, as Mr. Biden’s first attempt at mass debt cancellation did.

Of the total announced on Wednesday, $5.2 billion in forgiveness went to about 66,900 borrowers who qualified through adjustments that the Education Department made to the Public Service Loan Forgiveness program. It aids teachers, firefighters, and other government and nonprofit workers.

About $600 million in relief will go to around 54,300 borrowers who are enrolled in the SAVE plan, which ties monthly payments to income and household size, and who took out smaller loans for graduate school. All borrowers enrolled in the plan can receive forgiveness after 25 years at the most, but borrowers who took out $12,000 in loans or less can qualify after 10 years of payments.

An additional 39,200 borrowers enrolled in other income-driven repayment plans also had $1.9 billion forgiven through “administrative adjustments” to the number of payments they owed. The department said those adjustments were largely to correct a misuse of forbearance by certain loan servicers.

The department has also leaned on other methods to extend debt cancellation, including discharging loans held by students who the department found were defrauded by their schools. Just this month, for example, the department forgave the federal loans of the 317,000 people who attended the Art Institutes.

The much larger prong of the strategy — which involves forgiving runaway interest on loans that grew far beyond the original amount borrowed — is still pending, as the administration works to approve new rules. The administration has said more than 25 million people could qualify for relief under those regulations.

The period for public comments on part of that plan closed on Friday, and the proposal drew more than 65,000 comments.

Source link

Related Posts

Leave a Reply

Your email address will not be published. Required fields are marked *