Biden's Bold Move: $39B in Student Loan Forgiveness, Bringing Relief to 800K Borrowers

In recent news, the US Education Department notifies that thousands of student loan borrowers will receive notice of debt forgiveness. The Biden-Harris Administration announced that more than 800,000 borrowers of student loans will be eligible for $39 billion worth of debt relief over the coming months. This initiative aims to reduce the financial burden and relieve many borrowers who have loaned money for education. It signifies the government's willingness to make the loan repayment process easier and provide relief to needy borrowers.

This initiative is a follow-up to the payment count adjustment announced by the Biden- Harris Administration in April 2022; that addressed past inaccuracies in calculating the payment amount eligible for forgiveness under the (income-driven repayment) IDR plans. According to the Higher Education Act and the Department's rules, a borrower can get forgiveness after making 240 or 300 monthly payments. The monthly payment is about 20 or 25 years on an IDR or standard repayment plan.  Over 800,000 students will get their federal student debt relief as part of a government effort to fix years of mistakes. The Department of Education will facilitate the process of loan forgiveness for eligible borrowers by identifying and notifying them of their eligibility. Moreover, the discharge process will begin within 30 days of receipt of the notification.

According to the data released, 63,730 student loan borrowers were approved for relief in Texas, 61,890 in California, and 56,930 in Florida. A significant influx of students and graduates is expected to receive this invaluable financial aid, which could positively impact the financial well-being of thousands of students and their families. The Department has also approved cancelling student loans totaling over $116 billion, alleviating the debt repayment obligation for more than 3.4 million borrowers nationwide.

President Biden has affirmed that his administration will not halt its efforts. According to President Biden's plan, over 40M borrowers might have eliminated $10K to $20K of student loan debt. However, in last month's news, the Supreme Court impeded the implementation of President Biden's plan for student debt forgiveness by a 6-3 majority decision. Moreover, several legal proceedings seek to invalidate the plan.

Overall, the Biden-Harris administration's student debt relief efforts are laudable, as the administration has also taken action to facilitate affordable payments for borrowers in the future. The automatic loan forgiveness program complements other programs already in place to help public servants, borrowers with disabilities, and those affected by school closings. The US Education Department also introduces the "saving on a valuable education" (SAVE) plan. The SAVE plan offers highly affordable repayment options for student loans, further reducing the financial burden on students.