Biden to cancel another $5 BILLION in student debt for 74,000 borrowers just a week after announcing separate plan – are YOU affected?
President Biden has announced that his administration will cancel $5 billion in student debt for an additional 74,000 borrowers in the latest round of debt forgiveness.
The relief will go to borrowers who have an income-driven plan and have been making payments for at least 20 years, and people who have worked in the public service for 10 years or more.
This round of forgiveness brings the total number of people whose debts have been forgiven under the Biden administration to 3.7 million, the White House said in a report. rack Friday.
It comes just a week after Biden accelerated a separate forgiveness plan that will wipe out the debts of 6.9 million eligible Americans enrolled in the income-driven SAVE plan as early as next month.
The latest move is part of an effort by the biden administration to provide relief to borrowers – after the High Council halted its broader student loan forgiveness plan in June 2023 planning to forgive more than $400 million in debt.
President Biden has announced that his administration is forgiving $5 billion in student debt for an additional 74,000 borrowers in the latest round of debt forgiveness
The relief announced Friday follows action taken by the U.S. Department of Education for the “broken” income-driven repayment plans and the Public Service Loan Forgiveness program.
About $1.7 billion of the aid will go to 29,700 borrowers who are on income-driven repayment plans and have been repaying their loans for at least 20 years.
These plans are supposed to provide relief after a certain period of time – and after a certain number of payments by the borrower.
But longstanding problems with servicers accurately tracking borrower payments mean this hasn’t always happened.
Americans have been confused by the system and have struggled to get promised debt forgiveness.
About 43,900 teachers, nurses, firefighters and others who have worked in public service for a decade or more will receive $3.2 billion in loan forgiveness.
The latest round of support goes to people who have worked in public service for ten years or more (photo: New York City firefighters)
The Public Service Loan Forgiveness program has also long been criticized for poor communication between the Department of Education, loan servicers and borrowers, and for errors in tracking payment numbers.
“Since day one, we have been passionate about building the Public Service Loan Forgiveness Program so that our teachers don’t have to work a second or third job bartending or Ubering to make ends meet and pay off their student loans,” said the US Secretary of Education. Miguel Cardona wrote on X, formerly Twitter.
The announcement did not specify when exactly borrowers can expect their debts to be forgiven.
It comes a week after Department of Education officials confirmed that certain borrowers who originally withdrew $12,000 or less for college and made at least 10 years of qualifying repayments will have their debt completely forgiven in February.
This round of forgiveness brings the total number of people whose debts have been forgiven under the Biden administration to 3.7 million, the White House said in a statement.
Borrowers must also participate in the new income-driven repayment plan, known as SAVE.
The provisions come six months ahead of schedule and will especially help community college borrowers, low-income borrowers and those struggling to repay their loans, according to a White House statement.
Consumer advocates have praised Biden’s actions — and urged him to do more for those struggling with student debt ahead of the election.
“Student debt forgiveness tipped the balance in Democrats’ favor during the midterm elections,” said Astra Taylor, co-founder of the Debt Collective, a debt union. CNBC last year.
“If we fail to deliver results, we will demoralize and demobilize young people whose votes they cannot afford to lose.”
The Supreme Court rejected President Joe Biden’s $400 billion student loan forgiveness plan in June 2023. The justices ruled 6-3 against Biden’s plan
But Republicans have panned Biden’s latest aid plans, arguing that taxpayers will ultimately foot the bill if the U.S. national debt rises to $34 trillion.
“President Biden is downright desperate for votes before the election — so much so that he’s giving the Department of Education the green light to dump even more jet fuel on the already raging student debt fire,” said Virginia Foxx, president of the House Education Committee, R.N.C. in a statement following the announcement of the Biden administration’s SAVE plan last week.
Biden’s plan to forgive up to $400 million in student loans was blocked by the Supreme Court in June 2023.
The plan to cancel the debts of 26 million Americans was deemed unconstitutional and an overreach of the president’s executive powers.