Biden is vastly expanding his student loan rescue plan as it approaches the end of its term

The Biden administration has forgiven another $4.28 billion in student loans as the end of term approaches in just a month.

The latest round of debt forgiveness has been approved for almost 55,000 civil servants.

The move brings the total student loan debt forgiven under the Biden administration to nearly $180 billion for some 4.9 million borrowers.

However, the administration also announced it is withdrawing unfinished rules that would have provided additional debt relief to more than 38 million Americans.

President Biden has made canceling student loan debt one of his administration’s top priorities over the past four years, but as he prepares to leave office, some of those efforts are expected to be halted under Donald Trump.

With that, the Biden administration has taken several steps to complete the work before Biden leaves, but not everyone is happy about it.

Critics of debt forgiveness have accused the government of bailing out student loan borrowers by transferring the debt to American taxpayers.

At the same time, student loan advocates express disappointment that more hasn’t been accomplished during Biden’s term due to legal challenges.

The new relief announced Friday is the result of changes to the Public Service Loan Forgiveness (PSLF) program that have been implemented since Biden took office.

The government has forgiven $78 billion in debt for more than a million borrowers through PSLF.

‘Four years ago, the Biden-Harris Administration promised America’s teachers, military personnel, nurses, first responders and other public servants that we would fix the broken Public Service Loan Forgiveness Program, and I’m proud to say we have delivered. Education Secretary Miguel Cardona said in a statement.

Only 7,000 borrowers qualified for the loan forgiveness program before Biden took office and his team implemented PSLF changes.

Borrowers with public sector jobs are eligible for debt forgiveness after making 120 qualified payments.

In addition to making technical changes to the program, the Biden administration also allowed more borrowers to participate and ensured that the program is administered by the Department of Education rather than another loan servicer so that borrowers could track where they stand in terms of having their money. debt forgiven.

In addition to forgiving debt for government workers, the Biden administration has also moved to forgive debt for borrowers through the income-driven repayment plans, which have resulted in more than $56 billion being forgiven for 1.4 million borrowers under Biden.

Another one 1.6 million borrowers had $28.7 billion wiped out after being defrauded by schools, while more than half a million borrowers saw $16.2 billion in debt forgiven due to permanent disability during his tenure.

But some of Biden’s major plans to cancel student loan debt for a broader group of borrowers may not materialize until he leaves office in January.

The Biden administration scraps proposed rules that would have paved the way for 38 million borrowers’ student debt cancellations

The president’s first plan to forgive up to $20,000 in student debt for qualified borrowers was blocked by the U.S. Supreme Court in June 2023.

Then Biden moved to a so-called “Plan B,” but the administration announced it would withdraw those proposed rules as the clock ticked as the effort faced legal challenges.

Should the proposed rules remain unchanged and not be scrapped, the Trump administration could use them to more quickly advance its own agenda.

The plan, unveiled earlier this year, would have eliminated accrued interest for more than 20 million borrowers who owe more money on their student loans than they originally took out. It also shortened the time it took for borrowers to pay back their loans before receiving forgiveness.

“We are deeply disappointed that the actions of right-wing attorneys general have denied tens of millions of borrowers access to critical student debt relief,” said Persis Yu of the Student Borrowers Protection Center.

“President Biden’s proposals would have freed millions of people from the crushing weight of the student debt crisis and unlocked economic mobility for millions more workers and families,” she added.

Biden is divorced The Saving on Valuable Education (SAVE) plan was launched through the regulatory process earlier this year was also challenged by Republicans and has been temporarily blocked by the courts.

The plan would have lowered monthly payments for borrowers compared to other income-driven repayment plans, halted interest accrual and allowed some borrowers to see their debts disappear after 10 years instead of the standard 20 to 25 years.

The new Trump administration could simply drop the case, effectively halting the plan altogether, but the courts still have to weigh in.

If the SAVE plan does not move forward, it would mean that many borrowers could face higher costs when payments resume.