Oct 4, 2023
Just days after federal student loan payments resumed for millions of Americans, fresh hope has arisen for many cash-strapped borrowers.
President Joe Biden has officially canceled another $9 billion in student loan debt, providing relief for an additional 125,000 Americans.
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His latest action to “fix the broken student loan system” — announced by the White House on Wednesday — takes the total approved debt cancellation under his administration to $127 billion for nearly 3.6 million Americans.
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“This kind of relief is life-changing for individuals and their families. But it's good for our economy as a whole as well,” Biden told reporters at a press conference.
New student loan debt cancellation
This latest debt relief package comes to the aid of public servants, those who have been paying into income-driven repayment plans and Americans with disabilities. It is another win for borrowers after the U.S. Supreme Court blocked Biden’s $400 billion debt-relief proposal to help more than 40 million borrowers in June.
The Biden-Harris Administration has approved $5.2 billion in debt relief for 53,000 borrowers under Public Service Loan Forgiveness programs, as well as $1.2 billion for nearly 22,000 borrowers who have a total or permanent disability.
It is also granting nearly $2.8 billion in new debt relief for nearly 51,000 borrowers through fixes made to income-driven repayment to borrowers who made 20 years or more of payments but never got the relief they were entitled to.
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New student loan plan
The nation’s $1.7 trillion student debt problem has been one of Biden’s primary focuses for years.
“While a college degree is still a ticket to a better life, that ticket has become excessively expensive,” Biden said.
In addition to several debt relief packages, the Biden-Harris Administration launched a new income-driven repayment plan earlier this year called SAVE, which can make borrowers’ monthly payments as low as $0, depending on income and family size, and prevents balances from growing due to unpaid interest.
“My administration is doing everything it can to deliver student debt relief to as many as we can, as fast as we can,” Biden said.
It has also secured an increase to Pell grants and introduced new rules to protect borrowers from career programs that leave graduates with unaffordable debts or insufficient earnings.
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Bethan Moorcraft is a reporter for Moneywise with experience in news editing and business reporting across international markets.
