Biden Unveils $7B Student Debt Relief for 277K Borrowers

New Policies Boost U.S. Student Debt Forgiveness Efforts

by Zain ul Abedin
Biden Unveils $7B Student Debt Relief for 277K Borrowers
© Andrew Harnik/Getty Images

President Joe Biden declared a substantial $7.4 billion cancellation in student loans this Friday, extending financial relief to 277,000 borrowers under various repayment plans. This initiative marks a significant expansion in the government's commitment to reducing the burden of educational debts.

The relief primarily benefits those enrolled in the Saving on a Valuable Education (SAVE) plan alongside participants in Income-Driven Repayment and Public Service Loan Forgiveness programs. Introduced last summer, according to the Department of Education, the SAVE plan is designed to accelerate debt cancellation for borrowers with smaller loan balances.

With this announcement, the Biden administration's total debt cancellation efforts have reached $153 billion, affecting over 4.3 million Americans. "Today’s announcement builds on the extensive progress we’ve made in supporting students and borrowers over the last three years," President Biden remarked.

These efforts include significant increases to the maximum Pell Grant awards - the largest in over a decade - and reforms to the Public Service Loan Forgiveness program, ensuring that public sector workers like teachers, nurses, and police officers receive the benefits they deserve.

Biden's Debt Relief Expansion

President Biden emphasized his ongoing commitment to making higher education a gateway to the middle class rather than a financial barrier. "I will never stop working to cancel student debt - no matter how many times Republican elected officials try to stop us," he stated, underlining a politically charged commitment to education reform.

The announcement follows a series of proposed changes to student debt relief policies introduced earlier in the week. These revisions are expected to extend benefits to over 30 million Americans, in combination with prior measures taken during Biden’s term.

These include waiving accrued interest for millions, automatic discharge of loans for eligible borrowers, and eliminating debt for those who have been in repayment for two decades or more. Additional support will be provided to students enrolled in programs with low financial returns and those facing repayment hardships.

The Department of Education will invite public feedback on these proposals in the coming weeks. This call for public engagement comes after the Supreme Court invalidated Biden’s original plan to cancel up to $20,000 per borrower, impacting an estimated 43 million individuals.

This recent initiative represents a recalibrated approach to deliver on the administration's educational promises amid judicial setbacks.