Jimmy Williams, Polialert
In a move to provide further relief to borrowers, the Department of Education announced on Wednesday the approval of nearly $5 billion in federal student loan cancellations. This brings the total student debt relief granted under the Biden administration to an impressive $132 billion, benefiting more than 3.6 million borrowers.
Despite the Supreme Court striking down President Joe Biden’s signature student loan forgiveness program, which aimed to provide up to $20,000 in debt relief for low- and middle-income borrowers, the administration has persisted in finding alternative avenues for debt relief.
President Biden emphasized this commitment, stating, “We are continuing to pursue an alternative path to deliver student debt relief to as many borrowers as possible as quickly as possible.”
The recent round of cancellations was executed through existing federal student loan forgiveness programs, catering to specific categories of borrowers. These include public-sector workers eligible for the Public Service Loan Forgiveness program, which erases remaining student loan debt after qualifying workers make 10 years’ worth of monthly payments. Another category comprises borrowers who have made at least 20 years of qualifying payments in an income-driven repayment program but hadn’t previously received credit for all their payments.
Education Secretary Miguel Cardona highlighted the administration’s dedication to fixing the broken student loan system and ensuring eligible borrowers receive the relief they deserve. The discharges are a result of ongoing efforts to correct past administrative errors in borrowers’ accounts and temporarily expand certain debt relief programs.
A notable aspect of the relief effort involves a one-time recount of past payments, aiming to rectify administrative failures in tracking borrowers’ payments. This initiative, launched in April 2022, has now resulted in a series of debt relief announcements, with the Department of Education expected to continue announcing additional batches of eligible borrowers every other month through the spring of next year.
While the Biden administration’s actions have garnered praise for providing significant debt relief, they have also faced criticism. Some Republican lawmakers and conservative groups argue against the administration’s authority to recount payments, leading to a lawsuit filed by the New Civil Liberties Alliance on behalf of conservative groups, including the Cato Institute and the Mackinac Center for Public Policy.
In addition to canceling student loan debt, the Biden administration has worked to ease the financial burden on borrowers. The SAVE (Saving on a Valuable Education) repayment plan, launched this summer, offers generous terms, aiming to provide the smallest monthly payment for lower-income borrowers.
As the administration continues its efforts, it is also working on creating a new one-time student loan forgiveness program. Different from the one struck down by the Supreme Court, this initiative relies on a distinct legal approach and is undergoing a formal rulemaking process, with a proposed rule expected next year, followed by potential legal challenges.