Biden cancels another $9 billion in student loan debt days after payments restart
WASHINGTON (CNN) — The Biden administration has approved debt relief for an additional 125,000 student loan borrowers, totaling $9 billion in forgiveness, the White House said Wednesday.
The announcement comes just days after federal student loan payments restarted after a three-plus year pause.
Though the Supreme Court struck down President Joe Biden’s hallmark student loan forgiveness program, which promised up to $20,000 in debt relief for low- and middle-income borrowers, the administration has continued to find other ways to provide debt relief.
The cancellations announced Wednesday come through three different existing debt relief programs that have been plagued with problems in the past. The White House is conducting what it calls “fixes” to a “broken student loan system.”
An additional 53,000 borrowers will receive debt cancellation under the Public Service Loan Forgiveness program, which wipes away remaining student loan debt after qualifying public sector workers make 10 years’ worth of monthly payments.
Nearly 51,000 borrowers, who have been in repayment for at least 20 years, are getting relief thanks to a recount of their past payments. The administration has found that these borrowers already qualified for student loan forgiveness but were missing out because of past administrative errors.
And nearly 22,000 borrowers who have a total or permanent disability have now been approved for an automatic debt discharge through a data match with the Social Security Administration.
A White House official said that the new discharges bring the total approved debt cancellation to $127 billion for nearly 3.6 million borrowers so far during Biden’s time in office.
“For years, millions of eligible borrowers were unable to access the student debt relief they qualified for, but that’s all changed thanks to President Biden and this administration’s relentless efforts to fix the broken student loan system,” Secretary of Education Miguel Cardona said in a statement.
He added that the announcement “builds on everything our administration has already done to protect students from unaffordable debt, make repayment more affordable, and ensure that investments in higher education pay off for students and working families.”
The Biden administration has also made efforts to make monthly student loan payments more affordable. This month, about 28 million borrowers will be required to make payments for the first time since accounts were frozen under the Trump administration to help people struggling financially due to the Covid-19 pandemic.
This summer, the administration launched a new repayment program that promises to lower bills for millions of borrowers. And a recently released Department of Education rule, which is set to take effect next year, aims to keep tuition at for-profit colleges and career programs in check.
The Biden administration is also pursuing another pathway to providing some student debt relief, but it’s not clear who would be eligible or how much debt would be canceled. Last week, the Department of Education said a potential new program could focus on certain groups of borrowers, like those who have seen their balances grow to balances higher than what originally borrowed despite making payments.
This pathway requires the Department of Education to undertake a formal rule-making process, which typically takes months or even years – and could still face legal challenges.
Biden is set to give an update on efforts to cancel student debt later Wednesday.