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HomeusBiden administration cancels $9 billion in student debt as payments restart

Biden administration cancels $9 billion in student debt as payments restart

The Biden administration approved $9 billion in student debt relief Wednesday, just days after payments restarted following a three-year pause sparked by the pandemic.

The move provides student loan forgiveness for 125,000 Americans, according to the White House. Federal student loan payments began again Oct. 1 following the pandemic-era pause, affecting approximately 28 million borrowers.

“President Biden has long believed that college should be a ticket to the middle class, not a burden that weighs on families,” the White House said in a statement.

“That’s why from day one, his Administration has taken unprecedented steps to fix the broken student loan system, make college more affordable, and bring the promise of higher education in reach for more Americans,” the White House said.

The announcement Wednesday impacts three different categories of borrowers.

The administration approved $5.2 billion in debt relief for 53,0000 borrowers under Public Service Loan Forgiveness programs. The move cancels debt for eligible public sector and not-for-profit workers after they’ve made 10 years of direct student loan payments.

The administration also canceled nearly $2.8 billion in debt for nearly 51,000 borrowers who qualified for forgiveness based on past payments but were never provided loan relief.

An additional 22,000 borrowers with a total or permanent disability will receive $1.2 billion in student loan cancellation.

With Wednesday’s announcement the administration has now approved a total of $127 billion in student debt cancellation for 3.6 million borrowers, according to the White House.

That includes student debt relief for 715,000 public sector workers and 855,000 borrowers whom the Biden administration determined qualified for forgiveness in the past but did not receive loan relief due to administrative error.

“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,” Secretary of Education Miguel Cardona said in a statement.

The latest student loan forgiveness push comes roughly three months after the Supreme Court blocked a Biden administration program designed to waive up to $20,000 in student loans for millions of borrowers.

The court ruled in a 6-3 decision on June 30 that the administration needed authorization from Congress to create the student loan forgiveness program.

The decision was a blow to Biden, forcing the administration to seek alternative paths like the moves announced Wednesday to provide student debt relief.

Biden will deliver remarks at the White House on student loan debt Wednesday afternoon.

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