160K Student Borrowers Just Got Good News

Biden administration is moving to cancel a new round of student debt
By Newser Editors and Wire Services
Posted May 22, 2024 11:05 AM CDT
160K Student Borrowers Just Got Good News
President Biden delivers remarks on student loan debt at Madison College on April 8 in Madison, Wisconsin.   (AP Photo/Evan Vucci)

The Biden administration is canceling student loans for another 160,000 borrowers through a combination of existing programs. The Education Department announced the latest round of cancellation on Wednesday, reports the AP, saying it will erase $7.7 billion in federal student loans. With the latest action, the administration said it has canceled $167 billion in student debt for nearly 5 million Americans through several programs. "From day one of my administration, I promised to fight to ensure higher education is a ticket to the middle class, not a barrier to opportunity," President Biden said in a statement. "I will never stop working to cancel student debt." According to the Education Department, 1 in 10 federal student loan borrowers has now been approved for some form of loan relief.

The latest relief will go to borrowers in three categories who hit certain milestones that make them eligible for cancellation. It will go to 54,000 borrowers who are enrolled in Biden's new income-driven repayment plan, along with 39,000 enrolled in earlier income-driven plans, and about 67,000 who are eligible through the Public Service Loan Forgiveness program. Biden's new payment plan, known as the SAVE Plan, offers a faster path to forgiveness than earlier versions. The cancellation is moving forward even as Biden's SAVE Plan faces legal challenges from Republican-led states. A group of 11 states led by Kansas sued to block the plan in March, followed by seven more led by Missouri in April.

Biden's new plan aims to help borrowers with large sums of unpaid interest, those with older loans, those who attended low-value college programs, and those who face other hardships preventing them from repaying student loans. It would also cancel loans for people who are eligible through other programs but haven't applied. The proposal is going through a lengthy rulemaking process, but the administration said it will accelerate certain provisions, with plans to start waiving unpaid interest for millions of borrowers starting this fall.

(More student loans stories.)

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