The Biden administration announced on Wednesday that it would forgive $7.7 billion in student loans for more than 160,000 borrowers in an effort to reduce the burden of education debt. This relief is a result of improvements made to the U.S. Department of Education’s income-driven repayment plans and Public Service Loan Forgiveness program. Education Secretary Miguel Cardona stated that the administration remains committed to bringing student debt relief to millions more across the country.
The loan forgiveness includes $5.2 billion for 66,900 borrowers pursuing Public Service Loan Forgiveness, and $1.9 billion for 39,200 individuals enrolled in income-driven repayment plans. Additionally, $613 million will go to 54,300 borrowers under the Biden administration’s new income-driven repayment option, known as the Saving on a Valuable Education (SAVE) plan. This plan allows for student loan forgiveness after 10 years for those who initially borrowed $12,000 or less.
Following the Supreme Court’s rejection of President Biden’s broader student debt cancellation plan last summer, the administration has been exploring alternative ways to reduce borrowers’ balances. One area that has proven successful is the existing loan forgiveness options offered by the Education Department, which were historically difficult for borrowers to access. The Biden administration has now forgiven the debt of 4.75 million borrowers, totaling $167 billion in aid, through various improvements and expansions to these programs.
Consumer advocates have long criticized the complexity and lack of transparency in the Education Department’s loan forgiveness programs, with many borrowers struggling to navigate the system and access the relief to which they are entitled. For example, income-driven repayment plans often lead to loan forgiveness after a certain period, but the department had previously failed to properly track borrowers’ timelines. As a result, the department announced in 2022 that it would review these accounts to ensure that borrowers receive the forgiveness they are owed.
