7-15-2023 9:26am

Biden Administration Launches $39B Student Loan Relief Benefitting Over 800,000 Borrowers

In an attempt to rectify 'historical inaccuracies,' the program extends debt cancellation to those burdened by student loans for over two decades.

The Biden administration announced a $39 billion student loan cancellation initiative, set to relieve more than 804,000 borrowers who have carried their student debt for more than 20 years. This effort comes as a response to what the Education Department terms as "historical inaccuracies" and other mishandlings in the administration of the income-driven repayment programs.

This new initiative is separate from President Joe Biden's broader student loan relief program, which was overturned by the Supreme Court last month. However, this move demonstrates the administration's resolve in seeking alternative strategies for student debt relief following the legal setback.

“We will not stop there,” Vice President Kamala Harris commented, hailing the announcement as a “historic step” to mitigate the burden of student debt. She further emphasized the administration's dedication to ensuring Americans can access quality post-secondary education without the stress of unmanageable student loans.

The new relief strategy involved revising borrowers’ accounts to retroactively count months towards forgiveness under income-driven repayment plans. This adjustment enabled over 804,000 borrowers to meet the 20 or 25-year loan forgiveness threshold, depending on their repayment plan.

The Education Department officials announced that eligible borrowers would receive notifications of their loan forgiveness soon, with discharges set to begin 30 days thereafter. Looking ahead, the department plans to identify new groups of borrowers eligible for this benefit every two months, awarding all remaining retroactive credits next year to those nearing, but not yet reaching, the loan forgiveness thresholds.

Despite these steps forward, the initiative faces criticism, notably from GOP Rep. Virginia Foxx (R-N.C.), chair of the House Education Committee, who decried the announcement as illegal and costly for taxpayers, saying it circumvents the Supreme Court's decision. Despite such resistance, the Biden administration appears steadfast in its commitment to ease the burdens of student loan debt.