Biden cancels another $7.4bn in student loans for more than 277,000

Source: BBC 

US President Joe Biden has announced that he is cancelling $7.4bn (£5.9bn) in student debt for more than 277,000 people.

This comes days after he announced a proposal to help millions of Americans pay off student loans.

The “Plan B” aims to fulfil a campaign promise ahead of November’s election.

To date, the Biden-Harris Administration has cancelled $153bn (£122bn) in debt for 4.3 million people.

This latest round of debt relief will be split into three categories:

  • $3.6bn for nearly 206,800 borrowers enrolled in the government’s Saving on a Valuable Education (Save) repayment plan
  • $3.5bn for 65,800 borrowers through income-driven repayment plans
  • $300m for 4,600 borrowers through fixes to Public Service Loan Forgiveness

Those impacted by the cancellations will receive emails informing them starting from Friday, and the Department of Education says the relief will be processed in the coming weeks.

In a statement, US Under Secretary of Education James Kvaal said borrowers “have paid what they can afford, and they have earned loan forgiveness for the balance of their loan”.

The White House said it was using “every path available” to provide student debt relief to as many Americans as possible.

Last year, the US Supreme Court rejected President Biden’s initial plan to wipe away $430bn (£344bn) in student debt, completely erasing the outstanding balances of about 20 million people.

It ruled that Mr Biden did not have the authority to cancel that debt without congressional approval.

Since then, the White House has used existing provisions to cancel billions of dollars’ worth of debt, while also working to reform the student loan system in other ways.

Earlier this week, Mr Biden announced an “alternative path” to cancelling student debt.

This proposal will target relief for five groups of borrowers, including those burdened with “runaway interest”.

It aims to fully forgive debt for more than four million people, eliminate the interest balances of up to 23 million and relieve at least $5,000 for more than 10 million.

If implemented, Mr Biden’s new plans would cancel student debt for over 30 million Americans when combined with actions over the last three years, according to the White House.

Roughly one in eight Americans – around 43 million people – have outstanding student loan debt.


Related Post

No more posts to show

Post Comments

Leave a Reply

Your email address will not be published. Required fields are marked *