Reimagining Student Loan Debt Forgiveness: A New Era for Borrowers
The Biden administration announces $9 billion in student loan debt cancellation for an additional 125,000 borrowers
The Biden administration revealed on Wednesday that it will be erasing $9 billion in student loan debt for an additional 125,000 borrowers. These borrowers were already eligible for debt cancellation through various programs such as Public Service Loan Forgiveness, income-driven repayment plans, and discharges for individuals with disabilities.
Who are the latest beneficiaries of student loan debt cancellation?
The White House has provided a breakdown of the $9 billion debt forgiveness:
- $5.2 billion for 53,000 borrowers who served at least a decade in eligible public service fields like teaching or the military.
- Nearly $2.8 billion for almost 51,000 borrowers who have been in repayment for two decades or more and have finally reached the threshold for forgiveness through adjustments to income-driven repayment plans.
- $1.2 billion for close to 22,000 borrowers with permanent disabilities, identified through a Social Security data match.
A step towards fixing the broken student loan system
Education Secretary Miguel Cardona described these efforts by the Biden administration as a way to rectify the flaws in the student loan system. This announcement coincides with the resumption of student loan payments for millions of borrowers following a three-year hiatus during the pandemic.
Unveiling a series of debt relief measures
This recent announcement is part of a series of similar measures since June when President Biden’s original plan of providing up to $20,000 in loan forgiveness for most borrowers was struck down by the Supreme Court. Despite this setback, the administration has been able to chip away at student loan debt on a smaller scale.
The impact of student debt cancellation
The White House proudly claims to have eliminated $127 billion in student debt, benefiting approximately 3.6 million Americans. Recently, around 804,000 borrowers have experienced substantial debt forgiveness after paying down their loans for at least two decades without ever receiving the promised forgiveness. The 125,000 borrowers identified in the latest announcement were in a similar situation, having diligently made payments for over 20 years.
More relief on the horizon?
Looking ahead, the Biden administration is preparing for a second attempt at mass student loan forgiveness. A committee composed of colleges, borrowers, state attorneys general, and student loan servicers will convene next week to discuss potential strategies for erasing student loan balances on a larger scale. Though the process may be lengthy and subject to future administrations, borrowers are encouraged to explore the new income-driven repayment plan called Saving on a Valuable Education (SAVE). This plan can potentially set payments at $0 for borrowers whose income falls below a specific threshold determined by family size.
Borrowers enrolled in the Revised Pay As You Earn (REPAYE) program have already been automatically included in the new income-based option. Others have the opportunity to apply.
Read More of this Story at www.usatoday.com – 2023-10-05 23:24:04
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