College graduates everywhere are collectively sighing in relief as the Biden Administration announces that they are attempting to forgive some of the student loan debt in the U.S.
What exactly is this plan and how will this affect over 73,600 borrowers? Let’s get into it and see if you qualify for the new Public Service Loan Forgiveness program.
Biden Is Currently Working on Eliminating Student Debt
According to CNBC, “The Biden-Harris Administration has worked relentlessly to fix our country’s broken student loan system and address the needless hurdles and administrative inaccuracies that, in the past, kept borrowers from getting the student debt forgiveness they deserved,” U.S. Secretary of Education Miguel Cardona said in a statement.
The program would help find relief for some of the student debt in the U.S., which currently sits at roughly $1.74 trillion in 2023, according to government data.
Who Is This New Plan For?
The government will offer roughly $1.7 billion in aid to 29,700 borrowers currently enrolled in income-driven repayment plans. The rest of the money will help cancel loan debt for more than 43,900 borrowers who have worked in public service for a decade or more.
The Biden administration has attempted to find student loan forgiveness plans in the past, but they have failed. Will this one work?
Why Has It Been So Hard for the Government to Find a Spread Student Loan Forgiveness Plan?
Loan services failed to keep track of borrowers’ payments, according to CNBC, which has made it harder for the U.S. Department of Education to know who has paid what over some time.
Some borrowers in the Public Service Loan Forgiveness program have struggled to get debt erasure after errors in their payment counts and other issues plagued the loan services for years. There are a few ways borrowers can save with these budgeting tips.
How Much Student Debt Has the Biden Administration Forgiven?
As of 2024, the Biden administration has canceled more than $136 billion in student debt for over 3.7 million Americans. On top of that, many student loan forgiveness services help Americans lessen their burden of higher education.
Most of the people who are currency benefiting from the latest round are teachers, nurses, firefighters, and others in public service.
Why Are More People Not Feeling the Effects of Biden’s Plans?
The Biden administration has been trying to help borrowers since the 2020 presidential campaign trail. Biden vows to cancel at least $10,000 of student debt per person. This promise has made many U.S. borrowers excited to see the burden of their student debt disappear.
Since, the U.S. Department of Education offers many programs that can help borrowers find help, cancellation, or discharge based on their qualifications.
How Much Has the Biden Administration Forgiven?
In October, the Biden administration forgave $9 billion in loans for about 125,000 borrowers working in public service jobs and those with permanent disabilities. In December, 80,300 borrowers got a much-needed break, as nearly $5 billion was wiped from their student loan debt.
While this doesn’t affect all of the U.S. student loan debt, the Biden administration is attempting to find more ways to help find relief for some borrowers and limit the debt burden for the majority.
What Is the SAVE Program?
The administration started a program called SAVE. This program is helping reduce monthly payments and shorten the life of loans for millions of borrowers in the U.S.
In January, the Education Department announced that fast-track relief would be on the way for borrowers in the program with less than $12,000 in loans.
Some Feel That More People Need Help
While the Biden administration has done quite a bit for borrowers, many are asking for more from President Joe Biden.
The NAACP and more than 60 other organizations sent a letter to Cardona urging the administration to redefine “hardships” for borrowers, which would capture a larger portion of the population, including recent graduates, low-income borrowers, and people of color.
Biden Has More Plans for the Future
“My administration is able to deliver relief to these borrowers—and millions more—because of fixes we made to broken student loan programs that were preventing borrowers from getting relief they were entitled to under the law,” Biden said in a statement.
The president said on Friday that his administration was “continuing to pursue an alternative path to deliver student debt relief to as many borrowers as possible as quickly as possible.”
Is This Part of Biden’s Campaign for the 2024 Presidential Election?
It seems that this new plan could be an effort on the behalf of the Biden administration to paint the current president in a positive light before the 2024 presidential election.
“Joe Biden knows that real leadership means giving hardworking Americans the relief and breathing room they need to succeed, which is why he’s taken historic action to lower costs across the board, including canceling more student loans than any president in American history,” said Kevin Munoz, the senior spokesman for Mr. Biden’s re-election campaign.
When Does the New Plan Go Into Effect?
This week, Mr. Biden made an unannounced campaign stop at the home of an educator in North Carolina who had his loans forgiven. This latest plan does not currently have a set date for execution.
However, Biden’s statements are promising as many borrowers are still struggling to pay off debts as the economy takes a turn for the worse.
