The Biden administration has announced the cancellation of $5 billion in student loans for 74,000 borrowers.
The move is a part of a new wave of student loan forgiveness. The beneficiaries of the measures include public sector workers who have served in their positions for more than 10 years, such as teachers, nurses, and firefighters. Of the approved borrowers, 44,000 were having their education debt wiped clean after a decade of public service, according to President Joe Biden. Approximately 30,000 borrowers worked towards repayment for at least 20 years but “never got the relief they earned through income-driven repayment plans,” Biden added.
This latest round of debt relief comes after the 2020 Supreme Court ruling striking down the White House’s student loan debt relief plan. Since then, the Biden administration has launched a series of smaller relief programs. “My administration is able to deliver relief to these borrowers — and millions more — because of fixes we made to broken student loan programmes that were preventing borrowers from getting relief they were entitled to under the law,” Biden said.
The new relief efforts have brought the total number of people who have had debt forgiven under the current administration to 3.7 million. The White House recently announced that certain borrowers who had taken out fewer than $12,000 in federal loans would have their federal student debt eliminated. In December 2021, Biden approved around $4.8 billion in student debt cancellation for more than 80,000 borrowers.
In June 2020, the Supreme Court rejected Biden’s student loan relief plan, stating that it was illegal because Congress had not explicitly approved the program. The administration’s plan was designed to cancel up to $20,000 in debt for approximately 43 million eligible borrowers.
The new wave of debt cancellation comes as the student debt crisis in the US continues to escalate. According to a recent study, student debt in America has tripled over the last decade, leaving millions of Americans struggling with the burden of student loan payments. The pandemic has worsened the situation, making it even more difficult for borrowers to pay off their loans. Proponents of debt cancellation argue that it will help stimulate the economy by freeing up funds to be spent on other necessities.
Despite these efforts, some critics argue that the mass cancellation of debt is unfair to taxpayers who have not been given similar financial relief. They also say that such measures may discourage people from paying off their student loans in the future. However, advocates of student debt relief continue to push for additional measures to help borrowers who are struggling to make ends meet.
