The Biden administration announced Friday it would forgive $4.9 billion in student debt for 73,600 borrowers.
The relief is a result of the U.S. Department of Education’s fixes to its income-driven repayment plans and Public Service Loan Forgiveness program.
Out of the total, $1.7 billion of the aid will go to 29,700 borrowers who are currently enrolled in income-driven repayment plans. Those who have been in repayment for at least 20 years and have earned forgiveness but have not received it had their loans completely forgiven.
While income-driven plans are designed to eventually result in debt forgiveness after a specified period, historical challenges arose as loan servicers failed to accurately monitor borrowers’ payments, the Department of Education said. The Biden administration overhauled the program in 2022.
The latest round of forgiveness is part of a broader push by Biden to forgive student loan debt. After the Supreme Court ruled against Biden’s student loan forgiveness program last year that aimed to cancel up to $400 billion in student debt.
The government introduced the Saving on a Valuable Education (SAVE) Plan as part of an income-driven repayment plan to waive off education debt.
The Biden administration has now canceled more than $136 billion in student debt for over 3.7 million Americans, according to the White House. Consumer advocates have praised President Joe Biden for his recent actions but are pressuring him to do more.
On the campaign trail ahead of the 2020 presidential election, Biden vowed to cancel at least $10,000 of student debt per person.
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, in an interview last fall with CNBC.
