Biden administration cancels $7.7 billion in student loan debt for 160,000 borrowers
On Wednesday, the Biden administration announced the cancellation of an additional $7.7 billion in student loans for 160,000 Americans, continuing its efforts to alleviate the rising college debt burden.
Here’s what to know:
Biden administration loan forgiveness
The Education Department announced the cancellation of $7.7 billion in student loans for certain borrowers who received Public Service Loan Forgiveness, including teachers, nurses, and law enforcement officials.
The debt relief announced today is broken down into the following categories:
$5.2 billion for 66,900 borrowers through fixes to PSLF: The Administration has now approved $68 billion in forgiveness for more than 942,000 borrowers through PSLF.
$613 million for 54,300 borrowers through the SAVE Plan: This relief will go to borrowers enrolled in the SAVE Plan who had smaller loans for their post-secondary studies. Borrowers can receive relief after at least 10 years of payments if they originally borrowed $12,000 or less. Each additional $1,000 in borrowing adds 12 more months until forgiveness. All borrowers on the SAVE Plan receive forgiveness after 20 or 25 years, depending on whether they have loans for graduate school. The benefit is based upon the original principal balance of all Federal loans borrowed to attend school, not what a borrower currently owes or the amount of an individual loan. Today’s announcement brings total relief approved under the SAVE Plan to $5.5 billion for 414,000 borrowers.
$1.9 billion for 39,200 borrowers through administrative adjustments to IDR payment counts: These adjustments have brought borrowers closer to forgiveness and address longstanding concerns with the misuse of forbearance by loan servicers. Including today’s announcement, the Biden-Harris Administration has now approved $51.0 billion in IDR relief for more than 1 million borrowers.
How much are Texans saving?
Texans have the second-highest amount of student debt, behind Californians, the U.S. Department of Education reported. Around 3.8 million Texans owe an average of $33,400 on such loans. Fewer than 20% of Texas borrowers are on an income-driven repayment plan.
According to the Department of Education, a total of 4.75 million people have benefited from debt cancellation actions. The administration has now approved $167 billion in loan forgiveness.
More than 590,000 Texans are enrolled in the SAVE Plan, according to The Texas Tribune. Nearly 14,510 Texans no longer owe student loans thanks to the program, which has forgiven nearly $117 million in debt — more than in any other state, The Dallas Morning News reported.
In recent months, the Biden administration has been developing a set of new proposals, based on a different legal authority, aimed at providing relief to specific groups of borrowers.
This article originally appeared on Austin American-Statesman: Biden administration cancels $7.7 billion in student loan debt
