The Biden administration is canceling student loans for another 160,000 borrowers through a combination of existing programs, according to the Associated Press.
The Education Department announced today that it will erase $7.7 billion in federal student loans. With the latest action, the administration said it has canceled $167 billion in student debt for nearly 5 million Americans through several programs.
The latest relief will go to borrowers in three categories who hit certain milestones that make them eligible for cancellation. It will go to 54,000 borrowers who are enrolled in Biden’s new income-driven repayment plan, along with 39,000 enrolled in earlier income-driven plans, and about 67,000 who are eligible through the Public Service Loan Forgiveness program.
Biden’s new payment plan, known as the SAVE Plan, offers a faster path to forgiveness than earlier versions. More people are now becoming eligible for loan cancellation as they hit 10 years of payments, a new finish line that’s a decade sooner than what borrowers faced in the past.
The cancellation is moving forward even as Biden’s SAVE Plan faces legal challenges from Republican-led states.
Biden’s new plan aims to help borrowers with large sums of unpaid interest, those with older loans, those who attended low-value college programs, and those who face other hardships preventing them from repaying student loans. It would also cancel loans for people who are eligible through other programs but haven’t applied.
The Supreme Court rejected Biden’s earlier attempt at one-time cancellation, saying it overstepped the president’s authority. The new plan is being made with a different legal justification.
