On Friday, the Biden administration said that it would wipe off an extra $7.4 billion in student loan debt for 277,000 borrowers, 3,940 of whom were from Wisconsin.
The White House said that recipients of this most recent round of debt relief will get emails on Friday.
The declaration on Friday will result in the cancellation of debt for some 206,800 borrowers who were registered in the Biden administration’s income-driven repayment (IDR) scheme, known as the SAVE plan, which was established last year.
Borrowers who initially borrowed $12,000 or less to pay for education are eligible for assistance under the SAVE plan after making payments for at least ten years. Depending on the kind of loan, borrowers with greater debts may be eligible for debt forgiveness under the SAVE plan after 20 or 25 years of payments.
“A vast majority of individuals who are eligible for SAVE were previously eligible for Pell grants and hail from low- and middle-class communities,” Education Secretary Miguel Cardona stated during a press conference call.
Through “administrative adjustments” to their repayment plans, another 65,700 borrowers enrolled in other IDR programs will receive assistance in situations where certain loan servicers have made it more challenging for them to be eligible for relief.
The White House claims that although those on an IDR plan have been paying payments, they have never received the assistance they were promised. In essence, these borrowers were forced to make more payments under their IDR plans after the Department of Education announced in July that qualifying monthly payments that “should have moved borrowers closer to forgiveness were not accounted for.”
Ultimately, the Public Service Loan Forgiveness (PSLF) program will forgive the debts of 4,600 debtors. Those who have worked for more than ten years in a government or nonprofit capacity, such as teachers, firefighters, or police officers, are eligible for relief under this program.
The statement made on Friday represents only the most recent phase in the Biden administration’s student debt cancellation program, which has already authorized $153 billion in relief for over 4.3 million individuals. That is more than any previous administration in history and accounts for almost 9% of all federal student loan debt that is now outstanding.
For 44,380 Wisconsin residents, the Biden administration has granted $2 billion in debt forgiveness. This covers people with total or permanent disability, individuals participating in the SAVE Plan, and income-driven repayment schemes for Public Service Loan Forgiveness.
Additionally, the statement was made only a few days after the government presented fresh proposals to reduce over 30 million students’ college debt.
“We are mending a malfunctioning system,” Cardona stated. “We’re not giving up and are working to fix this broken system so that it serves the needs of people nationwide.”
Republicans, meanwhile, are opposing Biden’s efforts and might sabotage his plans, just as they did with his first comprehensive attempt to cancel student loans.
Biden’s revised SAVE plan is being opposed by the Republican attorneys general of eighteen states, who want to see an end to additional student loan cancellations.
Among other things, they allege that Biden is abusing his power and that he is avoiding the Supreme Court, which last year invalidated the president’s first proposal for a mass loan cancellation.
What these lawsuits would entail for loans that have already been canceled is unknown.
