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Biden Announces New $7 Billion Student Loan Debt Forgiveness

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Biden Announces New $7 Billion Student Loan Debt Forgiveness
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Biden Announces New $7 Billion Student Loan Debt Forgiveness

Source: Pinterest

Since President Joe Biden took office, his Administration has seen loan debt forgiveness plans. The latest is a $7 billion dedication to helping those in debt over their student loans.

The Biden Administration’s Loan Forgiveness Plans

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One of the Biden administration’s biggest goals was to help those in debt over their student loans. Over the years, the government has announced several loan forgiveness plans that cost billions of dollars. Now, the most recent development has approved a $7.7 billion student loan forgiveness, bringing the total amount of debt forgiveness to an impressive $167 billion. 

Needed Relief for Borrowers 

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The Biden Administration’s loan forgiveness program has been a huge source of relief for Americans struggling to pay their loans and live their lives properly.

Therefore, the recipients are beyond grateful to the government. However, some people have called out this forgiveness plan, claiming it was a ploy to buy votes in Biden’s favor for the 2024 elections.

Approving A New Batch

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On Wednesday, May 21, 2024, the federal government approved another 160,500 student loan borrowers for forgiveness. This also included people who had already benefited from Public Service Loan Forgiveness and were members of Saving on a Valuable Education (SAVE).

Therefore, the total number of people who have benefited from Biden’s loan forgiveness plan has reached an impressive 4.75 million.

The Commitment to Debt Relief

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Miguel Cardona, the federal education secretary, also released a statement about the new forgiveness. He noted that the Biden-Harris Administration remains steadfast in its effort to bring student debt relief to millions of Americans across the country.

Cardona added that one out of 10 federal student loan borrowers has gotten debt relief, with a huge burden lifted off their shoulders.  

ALSO READ: Democrats Kick Against Devastating Impacts of Student Loans on Social Security Benefits for Seniors 

Interference By the Supreme Court

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The Supreme Court initially threatened the success of Biden’s student debt forgiveness program expansion. Last year, the court blocked the plan to forgive the student debt forgiveness.

However, the federal government took this setback seriously and changed its course. As an alternative approach, it took a longer route and went through a longer rule-making process, which eventually gave it the success it needed. 

SAVE Plan 

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Over the course of his term as president, Biden has been highly committed to student loan forgiveness programs. Last year, the president led a summer income-fueled Saving on a Valuable Education (SAVE) plan, which was highly successful.

Over 8 million student loan debtors received different kinds of relief, with 4.6 million having their debt wiped clean. Others got discounts.

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Republicans Disagree

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Another huge obstacle that the president has had to overcome was the resistance from the country’s Republicans. Since the first announcement of the president’s intentions to relieve student loan debts for millions of citizens, Republicans have held many opposing views.

In fact, more than a dozen Republican state Attorneys General have filed lawsuits to block Biden’s newest forgiveness scheme. 

Why Do Republicans Not Want Loan Forgiveness?

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The Republicans who do not support loan forgiveness have a reason for this. According to them, more forgiveness of student loan debts takes the burden off the borrowers and simply transfers it to taxpayers. As it’s taxpayer’s money that is paying off the loans, they believe it is unfair to those who did not take out loans to pursue degrees. 

How to Be Eligible for Student Debt Forgiveness

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Now, more than ever, millions of people are eligible for Biden’s loan forgiveness schemes. As many more approach ten years of payment, more people are becoming eligible as the day goes by. Therefore, those who had decades to repay their student loans can apply and receive forgiveness. This has also given these people a sense of peace. 

ALSO READ: President Biden Set to Discuss New Student Loan Forgiveness Plan

Informing Successful Applicants 

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After verifying eligibility and applying, the successful candidates will receive an email informing them that the Department of Education has approved their application. The candidate will receive their debt cancellation from the Department of Education in the following weeks. Therefore, the lucky candidates will now be free of their yearlong debts and have room to breathe. 

The Estimated Cost

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When the Biden Administration developed the SAVE plan, it also calculated the cost implication over time. If it runs for over a decade, it will cost $156 billion. However, the Congressional Budget Office released a much higher estimate: $230 billion. That is almost a $100 billion increase compared to the initial budget. 

Help for Those in Need

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This new plan for student loan debtors will help a wide range of people. These include those with high sums of unpaid interest, older loans, or those who attended low-value college programs. Therefore, those who have faced several forms of hardship can be relieved of their debts without having to remain on strict budgets throughout their lives.

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