The US Education Department announced on Wednesday that over 160,000 student loan borrowers will have their debts canceled. T
his announcement adds to the $167 billion in total debt forgiveness provided under President Joe Biden’s administration.
With the election approaching, Biden is highlighting his administration’s success in forgiving loans for nearly 4.8 million borrowers through various programs and policies.
However, Republicans have criticized these efforts, arguing they are an unjust use of taxpayer funds and unfair to those who did not attend college.
“I promised to fight to ensure higher education is a ticket to the middle class, not a barrier to opportunity,” Biden said in a statement on Wednesday. “I will never stop working to cancel student debt — no matter how many times Republican elected officials try to stop us.”
The largest portion of the new $7.7 billion in relief will go to 66,900 public servants benefiting from the Public Service Loan Forgiveness program, which erases the balances of people who spend 10 years repaying their loans while in government or nonprofit jobs.
By temporarily relaxing the complex rules of the program in 2022, the Biden administration gave hundreds of thousands of borrowers an easier path to loan forgiveness.
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An additional 54,300 borrowers enrolled in Biden’s Saving on a Valuable Education (SAVE) repayment plan, which ties monthly student loan payments to earnings and family size, will also have their balances wiped clear.
Enrollees who borrowed less than $12,000 can have their debt forgiven after 10 years of payments, compared with the traditional wait period of 20 to 25 years under other income-driven repayment plans.
The remaining debt relief will go to 39,200 borrowers who have been in repayment on their loans for more than 20 or 25 years. These borrowers benefit from a temporary waiver of the rules governing income-driven repayment plans, known as the IDR adjustment.
The waiver grants longtime borrowers credit toward loan forgiveness to rectify inconsistencies in how student loan servicers have treated and tracked payments.
This month, the administration said it would give borrowers with older bank-based federal loans more time to consolidate to take advantage of the adjustment.
“One out of every 10 federal student loan borrowers approved for debt relief means one out of every 10 borrowers now has financial breathing room and a burden lifted,” Education Secretary Miguel Cardona said in a statement on Wednesday.
Biden’s loan forgiveness policies continue to raise ire among conservatives. Republican attorneys general filed two lawsuits seeking to overturn the SAVE repayment plan, accusing Biden of trying to provide sweeping debt cancellation despite the Supreme Court ruling against a similar policy last year. A group of congressional Republicans on Friday wrote to Cardona urging him to withdraw a pending regulation to forgive some or all student loans for more than 30 million Americans, calling it a “reckless” wealth transfer.
Elaine Parker, president of the conservative Job Creators Network Foundation, criticized the latest round of loan cancellation as “lawless and defies the Supreme Court and Congress,” calling it a “vote-buying exercise.”
Parker’s foundation was among the groups that sued in 2022 to block Biden’s plan to forgive up to $20,000 in student loans for some borrowers.
The Biden administration remains adamant that student loan cancellation benefits the broader economy.
A Council of Economic Advisers report released in April found that student loan discharges and other actions taken by the administration could boost short-term consumption, homeownership, and entrepreneurship.
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