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Biden administration cancels student loans for another 160,000 borrowers – Chicago Tribune

WASHINGTON – The Biden administration is canceling student loans for an additional 160,000 borrowers through a combination of existing programs.

The Education Department announced the latest round of cancellation on Wednesday, saying it will erase $7.7 billion in federal student loans. With the latest action, the administration said it has canceled $167 billion in student debt for nearly 5 million Americans through various programs.

“From day one of my administration, I promised to fight to ensure that higher education is a ticket to the middle class, not a barrier to opportunity,” President Joe Biden said in a statement. “I will never stop working to cancel student debt, no matter how many times Republican elected officials try to stop us.”

The latest relief will go to borrowers in three categories who reach certain milestones that make them eligible for discharge. It will go to 54,000 borrowers enrolled in Biden’s new income-driven repayment plan, along with 39,000 enrolled in previous income-driven plans and about 67,000 who are eligible through the Public Service Loan Forgiveness program. .

Biden’s new payment plan, known as the SAVE Plan, offers a faster path to forgiveness than previous versions. More people are now eligible for loan cancellation when they reach 10 years of payments, a new finish line that is a decade earlier than what borrowers faced in the past.

The cancellation moves forward even as Biden’s SAVE Plan faces legal challenges from Republican-led states. A group of 11 states led by Kansas sued to block the plan in March, followed by seven more led by Missouri in April. In two federal lawsuits, the states say Biden needed to go through Congress to review federal payment plans.

A separate action by the Biden administration aimed to correct previous mistakes that delayed payoff for some borrowers enrolled in other repayment plans and through public service loan forgiveness, which forgives loans to people who make 10 years of payments while working. in public service jobs.

The Biden administration has been announcing new batches of forgiveness each month as more people qualify in those three categories.

According to the Department of Education, 1 in 10 federal student loan borrowers have been approved for some type of credit relief.

“One in 10 federal student loan borrowers approved for debt relief means one in 10 borrowers now have financial breathing room and a burden lifted,” Education Secretary Miguel Cardona said in a statement.

The Biden administration has continued to cancel loans through existing avenues while also pushing for a new one-time cancellation that would provide relief to more than 30 million borrowers in five categories.

Biden’s new plan aims to help borrowers with large amounts of unpaid interest, those with older loans, those who attended low-value college programs and those facing other difficulties that prevent them from paying their student loans. It would also cancel loans for people who are eligible through other programs but have not applied.

The proposal is undergoing a lengthy rulemaking process, but the administration said it will expedite certain provisions, with plans to begin waiving unpaid interest for millions of borrowers starting this fall.

Conservative opponents have threatened to challenge that plan as well, calling it an unfair bonus for wealthy college graduates at the expense of taxpayers who didn’t attend college or who already paid off their loans.

The Supreme Court rejected Biden’s earlier attempt at a one-time cancellation, saying it exceeded the president’s authority. The new plan is being developed with a different legal justification.