President Joe Biden announced on Monday that 150,000 more people are getting their federal student loans forgiven. That means over 5 million borrowers have had their debt canceled since Biden took office.
Why Is This Happening?
- Biden’s Original Plan: The President wanted to create a broad, new loan forgiveness program for many Americans. However, the Supreme Court decided in 2023 that this plan was beyond the president’s powers.
- Using Existing Programs: After the Court’s ruling, the Biden administration switched to using and expanding programs that already existed, such as the Public Service Loan Forgiveness (PSLF) program and income-driven repayment plans.
Who Benefits From the Latest Announcement?
- People Cheated by Their Schools: Over 80,000 borrowers were victims of college scams or unfair practices.
- Borrowers With Disabilities: About 60,000 borrowers who have total and permanent disabilities.
- Public Service Workers: More than 6,000 people who have worked at least 10 years in public service jobs (like teachers, firefighters, or government employees).
How Do These Programs Work?
- Public Service Loan Forgiveness (PSLF)
- If you work for a government agency or certain non-profit organizations and make loan payments for 10 years, the rest of your loan can be canceled.
- Biden’s team made it easier to qualify by fixing old program errors.
- Income-Driven Repayment
- Your monthly loan payment is based on how much money you earn.
- After making these smaller payments for a set number of years—often 20 or 25—any remaining debt can be forgiven.
- Biden’s changes helped over 1.4 million people who had been paying back loans for decades.
- Borrower Defense to Repayment
- If a school misled or cheated its students (for example, by giving false information about job placement or accreditation), borrowers can apply to have their loans canceled.
- Total and Permanent Disability Discharge
- Borrowers with severe disabilities can be forgiven their student loans, recognizing they are unable to repay due to their condition.
Political and Legal Challenges
- Opposition: Critics—including former President Donald Trump and several conservative politicians—say that large-scale loan forgiveness transfers the cost of education to taxpayers who didn’t go to college, or who already paid off their loans.
- Supreme Court: When Biden tried to create a new, broad forgiveness plan, the Court said he had overstepped his powers. States challenging the plan argued that only Congress can approve such a large cancellation of debt.
Despite losing the legal battle for a broader cancellation, President Biden says he has canceled more student loan debt than any other president in U.S. history. He emphasizes that his goal is to make college affordable and prevent student loans from blocking people’s path to the middle class.
Key Takeaways
- More than 5 million borrowers have had some or all of their student debt forgiven since Biden took office.
- New cancellations include people who were cheated by their schools, those with permanent disabilities, and public service workers.
- The administration relied on improving existing programs after the Supreme Court blocked Biden’s original, large-scale forgiveness plan.
- This issue remains politically and legally controversial, with some applauding the relief and others claiming the president has gone too far.
In short, although the big, all-in-one plan to cancel student loans was struck down in court, the Biden administration continues to use multiple strategies to reduce or erase debt for select groups of borrowers. For millions of Americans, that relief could mean a better shot at financial stability and future opportunities.
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