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Biden Has Now Canceled $167 Billion In Student Debt

Massachusetts Institute of Technology student Isa Liggans, of Odenton, Md., front left, takes part in Muslim prayer with others Monday, April 22, 2024, at an encampment of tents at MIT, in Cambridge, Mass. Students at MIT set up the encampment of tents on campus to protest what they said was MIT's failure to call for an immediate ceasefire in Gaza and to cut ties to Israel's military. U.S. colleges and universities are preparing for end-of-year commencement ceremonies with a unique challenge: providing safety for graduates while honoring the free speech rights of students involved in protests over the Israel-Hamas war. (AP Photo/Steven Senne)

The Biden administration is canceling student loans for another 160,000 borrowers through a combination of existing programs.

The Education Department announced the latest round of cancellation on Wednesday, saying it will erase $7.7 billion in federal student loans. With the latest action, the administration said it has canceled $167 billion in student debt for nearly 5 million Americans through several programs.

“From day one of my administration, I promised to fight to ensure higher education is a ticket to the middle class, not a barrier to opportunity,” President Joe Biden said in a statement. “I will never stop working to cancel student debt — no matter how many times Republican-elected officials try to stop us.”

The latest relief will go to borrowers in three categories who hit certain milestones that make them eligible for cancellation. It will go to 54,000 borrowers who are enrolled in Biden’s new income-driven repayment plan, along with 39,000 enrolled in earlier income-driven plans, and about 67,000 who are eligible through the Public Service Loan Forgiveness program.

Biden’s new payment plan, known as the SAVE Plan, offers a faster path to forgiveness than earlier versions. More people are now becoming eligible for loan cancellation as they hit 10 years of payments, a new finish line that’s a decade sooner than what borrowers faced in the past.

The cancellation is moving forward even as Biden’s SAVE Plan faces legal challenges from Republican-led states. A group of 11 states led by Kansas sued to block the plan in March, followed by seven more led by Missouri in April. In two federal lawsuits, the states say Biden needed to go through Congress for his overhaul of federal repayment plans.

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