Biden administration to cancel $7.7 billion in student debt for more than 160,000 borrowers – NBC Chicago

• The Biden administration announced Wednesday that it would cancel $7.7 billion in student debt for more than 160,000 borrowers, its latest effort to reduce the educational debt burden on households.
• This relief is the result of the U.S. Department of Education’s enhancements to its income-driven repayment plans and its Public Service Loan Forgiveness program.

The Biden administration announced Wednesday that it would forgive $7.7 billion in student loans to more than 160,000 borrowers, its latest effort to reduce the educational debt burden on households.

This relief is the result of the U.S. Department of Education’s enhancements to its income-driven repayment plans and its Public Service Loan Forgiveness program.

“The Biden-Harris Administration remains persistent in its efforts to provide student debt relief for millions more people across the country,” Education Secretary Miguel Cardona said in a statement.

Wednesday’s loan forgiveness includes $5.2 billion for 66,900 borrowers seeking public service loan forgiveness, and $1.9 billion for 39,200 people enrolled in consumer-oriented repayment plans. income.

Another $613 million will be disbursed to 54,300 borrowers under the Biden administration’s new income-driven repayment option, known as the Saving on a Valuable Education, or SAVE, plan. This option leads to student loan forgiveness after 10 years for those who initially borrowed $12,000 or less.

Total pardons reach $167 billion

After the Supreme Court struck down President Joe Biden’s sweeping student debt cancellation plan last summer, the White House explored its existing power to reduce borrowers’ balances. One area he has found fruitful: the Department of Education’s already established but hard-to-access loan forgiveness options.

Including Wednesday’s round of relief, the Biden administration has so far erased debt for 4.75 million borrowers, for a total of $167 billion in aid. Much of that total comes from expanding the scope and remediation of these programs.

Historically, borrowers have found these relief options difficult or impossible to navigate, and many have complained about not receiving the assistance they were entitled to, consumer advocates say.

For example, income-driven repayment plans lead to loans being forgiven after a certain period, but the Department of Education often does not keep a proper accounting of borrowers’ schedules, according to reports. The ministry said it would review these accounts in 2022.