CNS News–The Biden administration, in a landmark move, has announced the forgiveness of $4.9 billion in student debt, impacting 73,600 borrowers. This significant relief effort stems from the U.S. Department of Education’s overhaul of income-driven repayment plans and the Public Service Loan Forgiveness program.
Secretary of Education Miguel Cardona emphasized the administration’s dedication to rectifying the longstanding issues plaguing the student loan system. He acknowledged the historical administrative hurdles that have previously prevented borrowers from receiving the debt forgiveness they were entitled to.
A substantial portion of the relief, approximately $1.7 billion, will benefit 29,700 borrowers under income-driven repayment plans. These plans are designed to culminate in debt forgiveness after a set period, yet failures in tracking payments by loan servicers have often derailed this outcome.
Further, the Department of Education is set to cancel $3.2 billion in loans for 43,900 borrowers who have dedicated over a decade to public service. The Public Service Loan Forgiveness program, intended to reward public service, has been beset by errors in payment counts and other administrative issues, which this move aims to correct.
Biden administration to forgive $4.9 billion in student debt for 73,600 borrowers https://t.co/AsQqDXScwx
— CNBC (@CNBC) January 19, 2024
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The specifics of when the eligible borrowers will receive this relief remain undefined. However, this action brings the Biden administration’s total canceled student debt to over $136 billion, affecting more than 3.7 million Americans. While consumer advocates commend these efforts, there is a growing call for more extensive debt cancellation. President Joe Biden, during his 2020 campaign, promised to cancel at least $10,000 of student debt per person.
The administration’s plans, however, faced a setback when the Supreme Court in June ruled against the president’s authority to instruct such widespread debt cancellation without Congress’s approval. This initiative reflects the Biden administration’s commitment to address student debt, a pressing issue for millions of Americans, and marks a significant step towards broader educational finance reform.
