The Biden administration said Wednesday that $7.7 billion in student loans will be forgiven for more than 160,000 people.
There are three types of borrowers who can get the help that was announced on Wednesday: public servants who have been paying on their loans for at least 10 years, borrowers who have been paying on their debt for more than 20 years, and borrowers who are in SAVE, the Biden administration’s repayment plan, and had relatively low initial balances.
President Joe Biden said in a statement that the relief was a promise from the start of his administration to fight to make sure that higher education is a way to get into the middle class and not a way to avoid opportunities.
This is the latest move by the White House to help people who are already eligible for certain programs get rid of their student loans. Voters are worried about how Biden is running the economy, even though unemployment is low and wage growth is pretty strong. So far, the Biden administration has helped 4.75 million people get rid of their student loans, which add up to $167 billion.
It is said that more than one in ten federal borrowers have had some of their debts forgiven. Biden said in his statement that those borrowers got an average of more than $35,000 in their debts forgiven.
Most of those borrowers were in debt-cancellation programs before the Biden administration, but it was hard for them to get the help they needed because of rules and paperwork. When Biden was in charge of the Department of Education, these programs were made to make it easier for borrowers to get help.
Some of these people are in Public Service Loan Forgiveness, a program that lets people who work for the government or certain nonprofits get their debt forgiven after 10 years of payments; others are in income-driven repayment plans, which should get rid of debt after 20 or 25 years; still others have severe disabilities that make it hard or impossible for them to work; and still others were scammed by their schools.
On top of that, the Biden administration started SAVE, a new income-based repayment plan. Most of these plans have people pay back their debt as a percentage of their income. After 20 or 25 years of payments, the rest of the debt is forgiven. People who borrowed less than $12k at first and paid it back over at least 10 years can get the rest of their debt forgiven through SAVE.
States ruled by Republicans are going to court to fight SAVE.
The $167 billion in debt relief that has been approved so far is not the same as the White House’s plan to forgive all student loans. If that program were put into place, it would help more than 25 million people get rid of some of their debt. Officials said they’d like to start forgiving debts under the plan in the fall, but opponents are likely to fight those efforts, so it will be hard for them to get the forgiveness done before the election in November.
Biden said in his statement Wednesday, “I will never stop working to get rid of student debt, no matter how many times Republican politicians try to stop us.”
