Biden Administration To Forgive $4.9 Billion In Student Debt For 73,600 Borrowers

The Biden administration announced Friday it would forgive $4.9 billion in student debt for 73,600 borrowers, a relief that is a result of the U.S. Department of Education’s fixes to its income-driven repayment plans and Public Service Loan Forgiveness program. 

“The Biden-Harris Administration has worked relentlessly to fix our country’s broken student loan system and address the needless hurdles and administrative inaccuracies that, in the past, kept borrowers from getting the student debt forgiveness they deserved,” U.S. Secretary of Education Miguel Cardona said in a released statement.

Roughly $1.7 billion of the aid will go to 29,700 student loan borrowers enrolled in income-driven repayment plans. Those plans are supposed to lead to debt forgiveness after a set period, but in the past, that hasn’t always happened because loan servicers failed to keep track of borrowers’ payments, experts say.

The relief will also benefit 43,900 borrowers who have worked in public service for a decade or more. Those borrowers will receive $3.2 billion in loan cancellation, the U.S. Department of Education added CBS News reported.

It’s unclear when eligible borrowers may expect to see relief.

The Biden administration has now canceled over $136 billion in student debt for more than 3.7 million Americans, the White House stated.

Consumer advocates have acknowledged President Biden’s achievements but are also calling on him to do more since it was part of his 2020 campaign to cancel at minimum $10,000 of student debt per borrower.

“Student debt cancellation tipped the balance in Democrats’ favor in the midterms,” said Astra Taylor, co-founder of the Debt Collective, a union for debtors, told CNBC. “Failing to deliver will demoralize and demobilize young people whose votes they cannot afford to lose.”