New Round of $7 Billion in Student Loan Debt Forgiveness Announced by Biden

By: David Donovan | Published: May 22, 2024

Further approval of $7.7 billion in student loan debt forgiveness has been announced by the Biden administration. This brings the total debt forgiven since President Biden took office to $167 billion.

This is the latest round of debt forgiveness in Biden’s effort to cancel out student loan debt for millions of borrowers.

A Relief for Struggling Americans

Many have voiced their appreciation for debt forgiveness amidst spiraling debt for many Americans as they deal with cutbacks across the board.

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On the eve of the Iowa caucuses, Vice President Joe Biden holds a campaign rally at Hiatt Middle School. He speaks into a mic and has a crowd behind him.

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Others have been quick to call out Biden’s wiping of student loan debt as being unfair and accusing Biden of trying to ‘buy votes’ in anticipation of the 2024 election.

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A New Round of Borrowers Approved

On Wednesday 160,500 borrowers were given approval for student debt forgiveness which brings the total amount of people who have had their debt wiped to 4.75 million.

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President Joe Biden and Vice President Kamala Harris take a group photo with the Cabinet members on Tuesday, July 20, 2021, on the South Portico of the White House

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This round of debt forgiveness extends to people who have received Public Service Loan Forgiveness, members of Saving on a Valuable Education (SAVE), and can apply for the shortened time-to-forgiveness benefit.

Education Secretary’s Commitment to Debt Relief

Miguel Cardona, Education Secretary, announced in a statement that “The Biden-Harris Administration remains persistent about our efforts to bring student debt relief to millions more across the country, and this announcement proves it.”

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Secretary of Education Miguel Cardona talks with reporters during a press briefing on Thursday, Aug. 5, 2021, in the James S. Brady Press Briefing Room of the White House

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Cardona went on to announce that “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”.

Supreme Court Interference

The success of the student debt forgiveness expansion was threatened by the Supreme Court which blocked the initial plan to cancel student loan debt last year.

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Following this setback, the Biden administration altered its course and went through a longer rule-making process as an alternative approach.

SAVE Plan Successes

Biden’s commitment to student loan forgiveness can be traced back to last summer’s income-propelled SAVE plan.

President Joe Biden and senior advisers watch the U.S. Senate pass the CHIPS and Science Act, Wednesday, July 27, 2022, in the Oval Office Dining Room of the White House

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Through this scheme, over 8 million borrowers have received relief, among them 4.6 million now have $0 in monthly payments.

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Republican Resistance

Biden’s canceling of student debt has faced its fair share of opponents however since he announced his intentions to relieve student loan debt for millions of Americans.

Democratic National Committee Maryland Election Eve Rally with President Joe Biden at Bowie State University Leonidas James Physical Education Complex at 1400 Jericho Park Road in Bowie MD

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Over a dozen Republican state Attorneys General have added their names to lawsuits that are trying to block this newest effort from the Biden administration.

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Hesitancy to Allow Forgiveness

The Republican perspective on the issue accuses the administration of simply transferring the weight of student loan debt to other taxpayers.

Delegates at the Republican National Convention, in Cleveland, July 21, 2016. There is a crowd of people facing a stage.

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Their argument is predicated on the fact that millions of taxpayers did not opt to take out large loans or pursue costly college degrees but are now paying the price for it.

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Cost to the Country

In its estimations, the Biden administration had previously calculated the SAVE plan’s expenses to add up to $156 billion over a decade.

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However, the Congressional Budget Office has said that this number is closer to $230 billion, an almost 30% increase in cost compared to initial figures.

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Notice of Approval

Those who are successful in their application for student loan debt forgiveness will receive emails informing them if they have been approved.

The Lyndon B. Johnson Building, headquarters of the United States Department of Education in Washington, D.C. There are cars parked in front of the office building.

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The cancellation of the debt will then be processed in the coming weeks according to the Education Department in a statement.

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Eligibility for Student Debt Forgiveness

Under Biden’s schemes more people than ever are now eligible for loan cancellation as they approach 10 years of payments.

President Joe Biden meets with NATO Secretary General Jens Stoltenberg for a bilateral meeting on Monday, June 7, 2021, in the Oval Office of the White House.

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This milestone provides a new finish line for student loan borrowers which is 10 years sooner than the previous cut-off date faced by borrowers previously.

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Help for a Range of Borrowers

The new plan has several targets for aiding borrowers including those with great sums of unpaid interest, people with older loans, and those who were attendants of low-value college programs.

Biden in a video conference with Vice President Harris and the U.S. National Security team, discussing the Fall of Kabul on August 15, 2021

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Additionally, the scheme aims to help those who face hardships that are preventing them from making student loan repayments and would cancel loans for those who are approved through other plans but have not applied.

While this announcement marks another milestone in Biden’s ambitious student loan debt forgiveness plan, Republican and Supreme Court opposition may still hinder the administration’s efforts.

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