On Wednesday, President Joe Biden revealed his authorization of $9 billion in student loan forgiveness for 125,000 individuals. This relief stems from the administration’s improvements to various programs, such as income-driven repayment plans and the Public Service Loan Forgiveness program.
Specifically, over $5 billion of this assistance will be directed towards 53,000 individuals who have dedicated a decade or more to public service. Additionally, $2.8 billion in forgiveness will benefit 51,000 borrowers enrolled in income-driven repayment plans, while another $1.2 billion will be allocated to 22,000 borrowers with disabilities.
Student Loan Forgiveness Measures
According to experts, this announcement is expected to provide electoral advantages to Biden as he seeks re-election.
“President Biden’s forgiveness of student loan debt surpasses that of any of his predecessors,” noted higher education authority Mark Kantrowitz. “This sets him apart from other contenders vying for the nation’s top leadership position.”
The most recent forgiveness initiative follows several months after the Supreme Court rejected President Biden’s proposal to eliminate up to $20,000 in student debt for tens of millions of Americans. Following this setback, Biden expressed his intention to explore alternative avenues to provide relief to borrowers.
In all, the Biden administration says it has now canceled $127 billion worth of debt for nearly 3.6 million Americans.
Response to the $9 Billion Student Loan Forgiveness
Astra Taylor, co-founder of the Debt Collective, an organization representing debtors, praised the $9 billion in assistance from Biden but urged him to take further action.
“If the Department of Education can cancel this amount, it has the capacity to cancel the entire debt burden, thus fulfilling and even surpassing the president’s commitment to borrowers currently struggling with the tumultuous return to loan repayment,” Taylor asserted.
Students, loan payments resumed on October 1, marking the end of a pause that lasted for over three years. Prior to the Supreme Court’s decision, James Kvaal, the Undersecretary of Education, had cautioned that a failure to implement President Biden’s ambitious student loan forgiveness plan could lead to a significant increase in delinquency and default rates.
More recently, the Consumer Financial Protection Bureau estimated that one out of every five student loan borrowers might encounter difficulties when loan payments resume. To mitigate the adverse effects of missed payments, including becoming delinquent, President Biden has also introduced a 12-month “on-ramp” period to repayment.
Experts suggest that the timing of this decision is, in part, influenced by political considerations, as data on borrower hardships is not expected to be available until after the 2024 presidential election.
Process for the Student Loan Forgiveness Program application.
Conclusion
President Biden’s $9 billion student loan forgiveness benefits 125,000 borrowers. Experts believe this may boost his re-election prospects, given his record-breaking debt relief. Despite previous setbacks, the administration seeks alternative solutions for borrowers. The timing may have political considerations, aligning with the 2024 election. Over $127 billion in debt has been canceled to aid millions.
