Washington, D.C. — The US Education Department announced on Wednesday that over 160,000 student loan borrowers will have their debts cancelled, adding to the $167 billion in total debt forgiveness under President Joe Biden’s administration.
As the election approaches, Biden is emphasizing his administration’s success in forgiving loans for nearly 4.8 million borrowers through various programs and policies. However, Republicans criticize the effort, arguing it is an unjust use of taxpayer funds and unfair to those who did not attend college.
“I promised to fight to ensure higher education is a ticket to the middle class, not a barrier to opportunity,” Biden said in a statement Wednesday. “I will never stop working to cancel student debt — no matter how many times Republican elected officials try to stop us.”
The largest portion of the new $7.7 billion in relief will go to 66,900 public servants under the Public Service Loan Forgiveness program. This program erases the balances of those who spend 10 years repaying their loans while working in government or nonprofit jobs. By temporarily relaxing the complex rules of the program in 2022, the Biden administration made it easier for hundreds of thousands of borrowers to achieve loan forgiveness.
Additionally, 54,300 borrowers enrolled in Biden’s Saving on a Valuable Education (SAVE) repayment plan, which ties monthly student loan payments to earnings and family size, will have their balances wiped clear. Enrollees who borrowed less than $12,000 can have their debt forgiven after 10 years of payments, compared with the traditional period of 20 to 25 years under other income-driven repayment plans.
The remaining debt relief will go to 39,200 borrowers who have been repaying their loans for more than 20 or 25 years. These borrowers benefit from a temporary waiver of the rules governing income-driven repayment plans, known as the IDR adjustment, which grants credit toward loan forgiveness to rectify inconsistencies in how student loan servicers have treated and tracked payments.
This month, the administration said it would give borrowers with older bank-based federal loans more time to consolidate to take advantage of the adjustment.
“One out of every 10 federal student loan borrowers approved for debt relief means one out of every 10 borrowers now has financial breathing room and a burden lifted,” Education Secretary Miguel Cardona said in a statement Wednesday.
Biden’s loan forgiveness policies continue to face conservative backlash. Republican attorneys general have filed lawsuits to overturn the SAVE repayment plan, accusing Biden of attempting sweeping debt cancellation despite the Supreme Court ruling against a similar policy last year. A group of congressional Republicans on Friday urged Cardona to withdraw a pending regulation to forgive some or all student loans for more than 30 million Americans, calling it a “reckless” wealth transfer.
Elaine Parker, president of the conservative Job Creators Network Foundation, also criticized the latest round of loan cancellation, calling it “lawless and defiant of the Supreme Court and Congress.”
“It is merely a vote-buying exercise,” said Parker, whose foundation was among the groups that sued in 2022 to block Biden’s plan to forgive up to $20,000 in student loans for some borrowers. “Taxpayer forgiveness of college debt only exacerbates the student loan crisis by giving colleges a blank check to continue overcharging students.”
Despite the criticism, the Biden administration asserts that student loan cancellation benefits the broader economy. A Council of Economic Advisers report released in April indicated that student loan discharges and other actions taken by the administration could boost short-term consumption, homeownership, and entrepreneurship.
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