WASHINGTON — The Biden administration is canceling student loans for an additional 160,000 borrowers through a combination of existing programs.
The Department of Education announced the latest round of cancellations on Wednesday, saying it will cancel $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 various programs.
“From day one of my administration, I have pledged to fight to ensure higher education is a ticket to the middle class, not a barrier to opportunity,” President Joe Biden said in a statement. “I will never stop working to cancel student debt — no matter how many times Republican elected officials try to stop us.”
The latest relief will go to borrowers in three categories who reach certain milestones that make them eligible for cancellation. It will go to 54,000 borrowers enrolled in Biden’s new income-driven repayment plan, along with 39,000 enrolled in previous income-driven plans, and about 67,000 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 previous versions. More and more people are now eligible for loan forgiveness as they complete 10 years of payments, a new finish line that is 10 years earlier than what borrowers have faced in the past.
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 filed a lawsuit in March to block the plan, followed by seven more states led by Missouri in April. In two federal lawsuits, the states say Biden had to go through Congress for his overhaul of federal reimbursement plans.
A separate move by the Biden administration aimed to correct previous mistakes that delayed cancellations for some borrowers enrolled in other repayment plans and through Public Service Loan Forgiveness, which forgives loans to people who make payments for 10 years while in a government job.
The Biden administration has announced new batches of forgiveness each month as more people become eligible under these three categories.
According to the Department of Education, 1 in 10 federal student loan borrowers have now been approved for some form of loan relief.
“Having one in 10 federal student loan borrowers approved for debt relief means one in 10 borrowers now have financial breathing room and a burden lifted,” Education Secretary Miguel Cardona said in a statement.
The Biden administration has continued to cancel loans through existing options, while also pushing for a new, one-time cancellation that would provide relief to more than 30 million borrowers in five categories.
Biden’s new plan is aimed at helping borrowers with large sums of unpaid interest, those with older loans, those who attended low-cost college programs and those facing other hardships that prevent them from paying back their student loans. It would also cancel loans for people who qualify through other programs but have not applied.
The proposal is going through a lengthy regulatory process, but the government said it will speed up certain provisions, with plans to start waiving unpaid interest for millions of borrowers from this fall.
Conservative opponents have threatened to challenge that plan as well, calling it an unfair bonus for wealthy college graduates at the expense of taxpayers who haven’t gone to college or already repaid their loans.
The Supreme Court rejected Biden’s earlier attempt at a one-time cancellation, saying it exceeded the president’s authority. The new plan is made with a different legal justification.
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