Biden Administration Grants Additional $9 Billion in Student Loan Forgiveness to 125,000 Borrowers

In a significant move aimed at alleviating the burden of student debt on Americans, the Biden administration announced on Wednesday that an additional 125,000 student loan borrowers will receive a share of $9 billion in debt forgiveness. This latest round of relief results from fixes made to income-driven repayment (IDR) and Public Service Loan Forgiveness (PSLF) programs, as well as the cancellation of debt for borrowers facing total and permanent disabilities.

The White House disclosed that these measures bring the total student debt cancellation under the Biden administration to a remarkable $127 billion, benefitting 3.6 million Americans. This announcement underscores the administration’s commitment to addressing the ongoing student loan crisis and providing much-needed relief to borrowers across the country.

A press release from the White House outlined the distribution of the $9 billion as follows:

• $5.2 billion has been allocated to provide relief for approximately 53,000 borrowers through the Public Service Loan Forgiveness program. This program aims to assist individuals working in public service roles by forgiving their student loans after a designated period of service.
• Another $2.8 billion in relief has been approved for approximately 51,000 borrowers. These borrowers were previously entitled to debt relief through income-driven repayment plans but had not received the relief they were owed after making 20 years or more of payments.
• The remaining $1.2 billion will benefit nearly 22,000 borrowers with total or permanent disabilities. These individuals have been identified and approved for debt discharge through the Social Security Administration, providing them with much-needed financial relief.

The announcement comes several months after the U.S. Supreme Court blocked President Biden’s initial student loan forgiveness plan in June. The original proposal aimed to cancel up to $10,000 in federal loans for borrowers earning less than $125,000 annually, and up to $20,000 for those who had utilized Pell Grants during their college education. This plan had the potential to eliminate a staggering $441 billion in outstanding student debt.

Notably, this month marks the resumption of monthly payments for over 40 million Americans who had their student loan payments paused since March 2020 due to the COVID-19 pandemic.

Despite legal challenges, the Biden administration has consistently pushed for student loan debt forgiveness for federal borrowers. In June, the Supreme Court rejected the administration’s earlier plan, which would have provided relief for millions of borrowers by canceling $10,000 in federal student loan debt and up to $20,000 for a specific group of borrowers.

A White House official emphasized President Biden’s belief that access to higher education should serve as a pathway to the middle class rather than a financial burden for families. The official also noted that the $9 billion in debt relief, announced on Wednesday, is designed to further this vision by addressing the challenges faced by borrowers through various means, including income-driven repayment fixes, PSLF support, and automatic relief for those with total and permanent disabilities.