The Biden administration announced Friday an additional $7.4 billion in student loan cancellations for about 277,000 borrowers, which would mean millions more will be canceled by the fall if new rules laid out by the White House remain in place. It builds on a plan announced earlier this week to forgive debt for many borrowers.
The relief package comes after a massive plan to wipe out more than $400 billion in debt was scrapped, with small, targeted steps for some borrowers that are expected to yield big results. This reflects the White House’s strategy. by the Supreme Court last year.
It also comes as President Biden seeks to shore up support among younger voters who may be disproportionately affected by rising education costs but who may be turning away over his policies toward Israel and the war in Gaza. It’s about.
Combined with previous actions, Friday’s announcement brings total debt forgiveness to $153 billion, impacting about 4.3 million borrowers to date, the administration said. The administration wants to forgive some or all of the loans held by a total of about 30 million borrowers. The administration announced it would notify the 277,000 people it identified by email on Friday.
“We have approved aid for approximately 1 in 10 of the 43 million Americans with federal student loans,” Education Secretary Miguel A. Cardona told reporters ahead of the announcement.
The new set of cancellations includes three categories of borrowers eligible under existing programs, with the majority of forgiveness borrowing relatively small amounts ($12,000 or less) and receiving government income-driven The money will be given to about 207,000 people who were enrolled in repayment plans. As a preservation.
Another 65,000 people enrolled in repayment plans will have their debts reduced through adjustments that fix what Cardona described as “management and service failures.” The remaining group will have their loans forgiven through the Public Service Loan Forgiveness Program because they have already qualified through 10 years of repayments while serving in the public service.
Administration officials are studying Supreme Court decisions that have rejected large-scale loan forgiveness and recommending a step-by-step approach to identifying specific groups of borrowers for cancellation under established laws such as the Higher Education Act. He said he was taking it.
Biden said that if the administration’s rules announced Monday are finalized after a comment period that could last into the summer, some people would have more interest payments than they originally borrowed, or He said 25 million borrowers could be given some level of forgiveness, including people who have refused loans and people who have refused loans. He was tricked and cheated by the school.
But Biden’s plan faces significant Republican opposition, mounting legal challenges from state-level officials and growing protests in Congress.
The administration’s SAVE plan could cost the government up to $475 billion over the next 10 years, according to an economic analysis.
The U.S. government is already the largest lender for Americans to pay for college, and the plan calls for the government to pay more of those costs than in the past.
The SAVE plan faces two challenges from Republican attorneys general, even though the White House said more than 8 million people had signed up as of Friday.
Congressional Republicans have reiterated their dissatisfaction with Biden’s student loan cancellation initiative following this week’s announcement, often characterizing it as unfair to borrowers who struggle to pay off their student loans without assistance. ing.
“Incentivizing people not to pay off their student loans, while also penalizing those who do and forcing subsidies on those who don’t,” Rep. John Moolener, R-Michigan, said at Wednesday’s hearing. “I am doing so,” he said. Mr. Cardona testified about the Department of Education’s budget request for next year.
“I don’t think it’s unfair. I think it’s like fixing something that’s broken,” Cardona said. “Now that I have a better repayment plan in place, I don’t have to pay back the loan in the future.”
