The Biden administration announced on Wednesday that it will forgive an additional $9 billion in student loans for borrowers who have been enrolled in income-driven repayment (IDR) and Public Service Loan Forgiveness plans.
This $9 billion forgiveness initiative will benefit 125,000 borrowers, consisting of 53,000 individuals under the Public Service Loan Forgiveness program, 51,000 participants in the IDR plan, and 22,000 borrowers who are facing total or permanent disability.
The White House highlights that those on the IDR plan have been making payments for over two decades without receiving the promised student debt relief. Meanwhile, the Public Service Loan Forgiveness program encompasses individuals who have served in government positions or nonprofit organizations for more than ten years.
It’s important to note that this relief only addresses a small portion of the overall student loan burden, as over 45 million people in the United States still collectively owe $1.75 trillion in student loans, while the cost of college education continues to rise.
“For years, millions of eligible borrowers were unable to access the student debt relief they qualified for, but that’s all changed thanks to President Biden and this Administration’s relentless efforts to fix the broken student loan system,” said Secretary of Education Miguel Cardona.
“The Biden-Harris administration’s laser-like focus on reducing red tape, addressing past administrative failures, and putting borrowers first have now resulted in a historic $127 billion in debt relief approved for nearly 3.6 million borrowers. Today’s announcement builds on everything our administration has already done to protect students from unaffordable debt, make repayment more affordable, and ensure that investments in higher education pay off for students and working families,” he added.
This announcement follows the release of the administration’s initial policy considerations for its upcoming phase of student debt relief, which will be developed through the negotiated rulemaking process.
The administration is exploring ways to assist several categories of borrowers, including those whose loan balances have grown beyond their initial amount, individuals who qualify for relief under specific programs but have not applied, borrowers facing financial hardship, and those who participated in programs that did not provide significant financial benefit.
The initial discussions regarding these policy considerations are scheduled for October 10th and October 11th during the first meeting of the process.