Biden cancels $9BN in student loan debt days after payments restart

President Joe Biden has forgiven another $9 billion in student loans, providing relief to 125,000 borrowers. The move came as borrowers prepared to restart payments after a three-year hiatus that began during the COVID-19 pandemic. “Americans saddled with unsustainable debt in exchange for a college degree has become the norm,” Biden said in a speech at the White House.

He argued that canceling student debt is good for the economy because borrowers will spend their payment money on other things. “This kind of relief is life-changing for individuals and their families. But it is also good for our economy as a whole. Freeing millions of Americans from the crushing burden of student debt means they can get their lives in order. They can think about buying a house. They can start a business. They can start a family. This is important. This is important for their daily lives,” the president said.

In total, 3.6 million borrowers will have had $127 billion in debt wiped out since Biden took office. “My administration will continue to use every tool at our disposal to ease the burden of student debt so that more Americans are free to achieve their dreams. It’s good for our economy. It’s good for our country. And it will change their lives,” he said. Federal student loan payments resumed on October 1.

In June, the Supreme Court canceled Biden’s student loan forgiveness program, which promised up to $20,000 in debt relief for low- and middle-income borrowers. The government has continued to find other ways to provide debt relief. In the aftermath, Biden said he would pursue new measures to provide student loan relief.

He relies on a patchwork of different programs to eliminate debt, such as government loan forgiveness and the SAVE Plan, which lowers payments by tying them to borrowers’ incomes. According to a White House fact sheet, the new measures include: Biden’s plan could appeal to young voters as the country heads into the 2024 presidential election.

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