WASHINGTON — As federal student loan repayments restart, the Biden administration Wednesday announced an additional $9 billion in student loan forgiveness for 125,000 borrowers.
“For years, millions of eligible borrowers were unable to access the student debt relief they qualified for, but that’s all changed thanks to President Biden and this Administration’s relentless efforts to fix the broken student loan system,” U.S. Secretary of Education Miguel Cardona said in a statement.
The announcement comes days after federal student loan repayments restarted following a nearly three-year pause due to the pandemic. Borrowers with federal student loans have the option of an on-ramp program, where they can delay making payments for 12 months, but interest will still accrue.
The $9 billion in new relief includes $5.2 billion in forgiveness for 53,000 borrowers in the Public Service Loan Forgiveness program; $2.8 billion in forgiveness for 51,000 borrowers from a one-time fix to income-driven repayment plans; and $1.2 billion in forgiveness for 22,000 borrowers with permanent disabilities.
The PSLF program wipes away remaining student loan debt after qualifying public sector workers have made 10 years’ worth of monthly payments. Since October 2021, the Biden administration has forgiven more than 715,000 borrowers with PSLF loans, totaling $50.8 billion.
The one-time fix to the income-driven repayment program comes after long-time borrowers, including those who had been making payments for 20 years or more, were denied relief they were eligible for under the repayment plans. More than 800,000 federal student loan borrowers were granted relief after the adjustment was made, totaling $39 billion.
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With Wednesday’s announcement, more than 854,870 federal student loan borrowers have had their student loan debt forgiven through the IDR adjustment, totaling nearly $42 billion in relief, the administration said.
The Department of Education also implemented a new income driven repayment program known as Saving on A Valuable Education, or SAVE, and many borrowers have been automatically funneled into the program. It’s a plan that, for some borrowers, could result in no monthly payments.
So far, the Biden administration has approved up to $127 billion in student debt cancellation for about 3.6 million borrowers.
“Today’s announcement builds on everything our administration has already done to protect students from unaffordable debt, make repayment more affordable, and ensure that investments in higher education pay off for students and working families,” Cardona said.
The Department of Education is also trying to go through the formal rulemaking process of canceling federal student loan debt after the Supreme Court this summer struck down the Biden administration’s one-time debt relief program that would have canceled up to $20,000 in loans for some borrowers.
Republicans have long criticized the Biden administration’s policy to provide debt relief. Louisiana Republican Sen. Bill Cassidy said the White House is shifting the debt relief onto taxpayers.
“The Department still refuses to share with Congress what statutory authority they are claiming to justify this expenditure of taxpayer dollars,” Cassidy said in a statement. “This is part of a pattern of the Biden administration illegally acting without congressional approval, costing the American people hundreds of billions of dollars.”
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