Biden’s student debt relief efforts reach new milestone with $4.5 billion forgiven
The United States is grappling with a student debt crisis of unprecedented proportions. As tuition costs continue to rise, an increasing number of students are turning to loans to finance their education. In response to this growing issue, President Joe Biden announced a student debt relief plan last year. Despite facing numerous hurdles, the Biden administration has marked a significant milestone.
On Thursday, the administration approved $4.5 billion in student-debt cancellations for nearly 60,000 workers.Amid the worsening student debt crisis in the U.S., this news offers a sigh of relief for many. Although legal challenges have stalled other debt-relief programs, these borrowers benefited from reforms to the government’s Public Service Loan Forgiveness (PSLF) program, as reported by Bloomsberg.
Since the inception of the PSLF initiative in 2007, more than $73 billion in loans have been forgiven, with over 1 million borrowers receiving relief under Biden’s administration. Borrowers eligible for the latest round of forgiveness are expected to see their debts cleared in the coming weeks.
One of President Biden’s key promises during his 2020 campaign was to alleviate the student debt burden. However, his efforts have faced significant legal challenges, most notably the Supreme Court’s rejection of his sweeping proposal to forgive debt for over 40 million people.
A separate initiative, the Saving on a Valuable Education (SAVE) Plan, was also temporarily halted by the courts in August. The SAVE plan is an income-driven repayment plan that calculates borrowers’ monthly payments based on their income and family size, offering several benefits to reduce repayment burdens. Under this plan, borrowers’ payments are capped at a percentage of their discretionary income, and after 20 to 25 years of consistent payments, any remaining balance can be forgiven.
Over the 10 months the SAVE plan was available, more than 8 million borrowers enrolled, with approximately 400,000 receiving some form of debt cancellation. However, the program was cut short in July 2023, when a federal appellate court issued an injunction, and the Supreme Court later upheld this decision in August, further delaying the program.
As the legal battle continues, the Biden administration remains committed to advocating for other forms of relief, working to streamline existing programs and reduce administrative barriers that have historically limited access to loan forgiveness.
While Vice President Kamala Harris has pledged to work towards lowering education costs and making higher education more affordable, Donald Trump has criticized the administration’s push to forgive student debt. However, Trump has not yet detailed any plans to address the current student loan situation.
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On Thursday, the administration approved $4.5 billion in student-debt cancellations for nearly 60,000 workers.Amid the worsening student debt crisis in the U.S., this news offers a sigh of relief for many. Although legal challenges have stalled other debt-relief programs, these borrowers benefited from reforms to the government’s Public Service Loan Forgiveness (PSLF) program, as reported by Bloomsberg.
Since the inception of the PSLF initiative in 2007, more than $73 billion in loans have been forgiven, with over 1 million borrowers receiving relief under Biden’s administration. Borrowers eligible for the latest round of forgiveness are expected to see their debts cleared in the coming weeks.
One of President Biden’s key promises during his 2020 campaign was to alleviate the student debt burden. However, his efforts have faced significant legal challenges, most notably the Supreme Court’s rejection of his sweeping proposal to forgive debt for over 40 million people.
A separate initiative, the Saving on a Valuable Education (SAVE) Plan, was also temporarily halted by the courts in August. The SAVE plan is an income-driven repayment plan that calculates borrowers’ monthly payments based on their income and family size, offering several benefits to reduce repayment burdens. Under this plan, borrowers’ payments are capped at a percentage of their discretionary income, and after 20 to 25 years of consistent payments, any remaining balance can be forgiven.
Over the 10 months the SAVE plan was available, more than 8 million borrowers enrolled, with approximately 400,000 receiving some form of debt cancellation. However, the program was cut short in July 2023, when a federal appellate court issued an injunction, and the Supreme Court later upheld this decision in August, further delaying the program.
As the legal battle continues, the Biden administration remains committed to advocating for other forms of relief, working to streamline existing programs and reduce administrative barriers that have historically limited access to loan forgiveness.
While Vice President Kamala Harris has pledged to work towards lowering education costs and making higher education more affordable, Donald Trump has criticized the administration’s push to forgive student debt. However, Trump has not yet detailed any plans to address the current student loan situation.
Ready to lead with AI? Enroll now with GrowFast to transform your business strategy. Click here!
