Get 40% Off
🚨 Volatile Markets? Find Hidden Gems for Serious OutperformanceFind Stocks Now

Biden administration forgives $4.9 billion in student loans

Published 01/19/2024, 06:16 PM
Updated 01/20/2024, 06:13 AM

WASHINGTON - Today, the Biden administration announced the cancellation of nearly $5 billion in student debt for an additional batch of 74,000 borrowers. This move is a targeted relief effort after the Supreme Court blocked a more expansive $400 billion loan forgiveness plan in June 2023.

The debt forgiveness is particularly beneficial for public servants including teachers and nurses with ten years' tenure, addressing long-term repayment challenges faced by these individuals. The Department of Education (ED) confirmed that about 44,000 public sector workers will receive forgiveness under Public Service Loan Forgiveness (PSLF).

In addition to this, almost 30,000 long-term payers who missed out on income-driven repayment (IDR) plan benefits are also included. The distribution includes $1.7 billion for adjustments to IDR affecting 29,700 borrowers and an additional approval of $45.7 billion in IDR relief for over 930,500 individuals. Furthermore, PSLF adjustments contribute another $3.2 billion aiding 43,900 borrowers.

To date under this administration, over $136.6 billion was forgiven through various avenues for about 3.7 million people; around $42 billion through IDR plans aiding approximately 855,000; and $11.7 billion for nearly half a million disabled borrowers.

Earlier this week, the administration also enhanced the Saving on a Valuable Education Plan (SAVE). This plan expedites debt forgiveness for those consistently paying off initial loans up to $12,000 for over a decade, providing further relief for borrowers. The SAVE plan has seen participation from almost seven million individuals.

Secretary Cardona reiterated the dedication to helping public servants and those qualifying under IDR forgiveness schemes as part of ongoing efforts to provide student debt relief. These measures come as a part of President Biden's alternatives under the Higher Education Act of 1965 following judicial opposition to his broad loan absolution proposal.

3rd party Ad. Not an offer or recommendation by Investing.com. See disclosure here or remove ads .

However, critics voice concerns regarding fairness and the failure to confront soaring educational expenses directly through these policies. They argue that these measures, while providing relief to some, do not address the overall problem of a total of $1.6 trillion in federal student loan debt burdening some 43 million Americans.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.

Latest comments

Did our congressmen vote on this, or is this just another item for the SCOTUS to overrule?
Key takeaway: Why work to pay off your debts, the FEDs got your back. Keep partying
All those poor schmucks with work ethic that toiled 2 jobs while attending school to pay for their tuition. Takeaway message...there are no rewards for hard work and why work to pay off debts. Keep partying!!
Debt doesn't just go "poof" and disappear. It shifts somewhere else. I see more inflation on the horizon. Additionally, this move by the third term Obama, was to buy more votes to help keep his puppet in office.
Taxpayer donkeys get the tab while the government pats itself on the back
Not his money to give away. Expect more inflation.
If student loan forgiveness is a good thing than surely other debt forgiveness would be good, also no taxes would be even better.
maybe first 2 college courses should be responsibilities and basic finance. Tax payers picking up the tab for irresponsible choices is not a accomplishment Brandon
Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.