President Biden announced Wednesday the cancellation of $7.7 billion in student loans belonging to 160,000 borrowers, building on his strategy to reduce college debt by streamlining existing programs as his administration rolls out a broader forgiveness plan tracked.
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 informing them of their approvals according to a statement from the Ministry of Education.
The steady drumbeat of loan forgiveness announcements from the White House this year has become a centerpiece of Mr. Biden’s re-election bid, in which he has consistently cited overcoming the cost of education as the biggest hurdle for working families.
“From day one of my term in office, 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 represents another small step forward on an issue that has long troubled the president. While he has canceled more student debt than any of his predecessors, he has fallen far short of the mass debt relief he promised and has disappointed many of the younger voters who overwhelmingly supported him in 2020 but showed signs of defection.
The Biden administration has now canceled about $167 billion in loans for 4.75 million borrowers, representing about one in 10 federal borrowers, eliminating an average of $35,000 in debt. The president has set a much bigger goal: debt relief for nearly 30 million borrowers as early as this fall. But the broader program is still being developed and could fall victim to legal challenges, as was the case with Mr. Biden’s first attempt at mass debt relief.
Of the total announced Wednesday, $5.2 billion in forgiveness payments went to about 66,900 borrowers who qualified through adjustments the Education Department made to the public service loan forgiveness program. It helps teachers, firefighters and other government and nonprofit workers.
About $600 million in relief will go to about 54,300 borrowers who participate 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 qualify for forgiveness after no more than 25 years, but borrowers who took out loans of $12,000 or less can qualify after 10 years of payments.
An additional 39,200 borrowers who enrolled in other income-driven repayment plans also had $1.9 billion forgiven through “administrative adjustments” to the number of payments owed. The department said these adjustments were primarily intended to correct abuse of forbearance by certain loan servicers.
The ministry has also resorted to other methods to expand debt relief, including paying off loans held by students who the ministry determined were defrauded by their schools. Just this month, for example, the department forgave federal loans for the 317,000 people who attended the arts institutions.
The much larger part of the strategy – which involves waiving escalating interest rates on loans that have grown far beyond the original amount borrowed – is still pending as the government works to adopt new rules. The government said more than 25 million people could be eligible for relief under these rules.
The public comment period on part of that plan ended Friday and the proposal drew more than 65,000 comments.
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2024-05-22 09:04:33
www.nytimes.com
