President Joe Biden will cancel an additional $9 billion worth of student debt the White House announced, after federal student loan repayments restarted this month following a three-year pause due to the pandemic.
The Biden adminstration has cancelled $127 billion in student debt so far.
According to the White House, the latest loan relief will help 125,000 Americans and is a result of changes made to federal programs for low-income individuals, public servants and borrowers with disabilities.
The relief includes $5.2 billion in debt forgiveness for 53,000 borrowers under the “Public Service Loan Forgiveness programs,” which covers public service employees in federal, state or local government.
Around 51,000 borrowers who made 20 years or more of payments will get $2.8 billion in debt relief due to “fixes” to the income-based repayment program.
The remaining $1.2 billion relief will aid 22,000 borrowers with “total or permanent disability.”
Biden has been forced to lean on various federal programs to help lower student debt—a key campaign promise—after the Supreme Court’s conservative majority struck down his original plan to slash around $430 billion in student debt
$127 billion. That is the total amount of student debt relief Biden has approved since taking office, aiding nearly 3.6 million borrowers, the White House said.
The repayment of federal student loans is set to resume this month, following a three-year moratorium on payments due to the Covid-19 pandemic. Interests on the loans began accruing starting September 1, after Congress passed legislation to end the moratorium that went into effect in 2020. The Biden administration is encouraging eligible people to enroll in the new repayment plan—SAVE—approved by the president in August, which calculates loan payments based on a borrower’s income and family size, thus enabling lower monthly payments. In total, Americans hold around $1.774 trillion in outstanding student debt, 93% of which are federal loans.
Biden’s New Student Loan Plan Begins Tuesday—Here’s What To Know About The SAVE Repayment Option (Forbes)