The Biden administration announced on Friday that it plans to forgive approximately $7.4 billion in student loans for 277,000 borrowers by leveraging existing forgiveness programs. This initiative is part of an ongoing effort under President Joe Biden to ease the financial burden for specific groups such as public sector employees, facilitating their qualification for loan forgiveness. Additionally, a new repayment scheme has been introduced which shortens the journey to forgiveness for low-income borrowers, though this plan faces legal challenges from several Republican-dominated states.
To date, the administration has erased about $153 billion in student loan debt for nearly 4.3 million individuals, which constitutes over 9% of the total federal student loan debt. With the November election looming, the administration is actively publicizing its debt relief efforts, announcing new measures monthly and directly contacting eligible borrowers. Recently, Biden proposed further debt relief initiatives expected to be implemented by this fall.
Criticism from Republican circles has been sharp, with many arguing that these measures unfairly shift the financial burden to taxpayers who did not pursue higher education or have already paid off their loans. They also accuse Biden of bypassing the Supreme Court, which previously rejected a major student loan forgiveness initiative proposed by his administration.
In response to the administration’s latest repayment plan, known as SAVE (Saving on a Valuable Education), which provides favorable terms for low-income borrowers, two Republican-led lawsuits have been filed. Of the latest round of debt relief, $3.6 billion will benefit those enrolled in the SAVE plan.
White House press secretary Karine Jean-Pierre highlighted opposition from Republican states, criticizing them for attempting to block benefits to their constituents and maintain high debt levels without relief.
Under the SAVE plan, launched last year, nearly 8 million borrowers have enrolled, with about 360,000 benefiting from debt cancellation. This plan, set to be fully implemented by July, offers reduced monthly payments and ensures that unpaid interest does not accumulate if full payments are made, preventing any increase in loan balances.
Despite a setback in 2022 when the Supreme Court struck down a comprehensive forgiveness program that would have canceled up to $20,000 in debt for individuals earning under $125,000, Biden has successfully canceled more student loan debt than any previous president using existing programs. This includes relief for public-sector workers, disabled borrowers, and victims of for-profit college frauds. Furthermore, the Department of Education is rectifying administrative errors in past payments, accelerating the path to forgiveness for some borrowers.
Looking forward, the administration continues to develop new proposals for debt relief based on alternative legal grounds, which could be implemented as early as this fall, aiming to assist borrowers whose loan balances have exceeded their initial amounts.