The Biden administration announced Wednesday that it is forgiving another $9 billion in student loans for borrowers who have been on an income-driven repayment (IDR) and Public Service Loan Forgiveness plan.
The $9 billion will forgive the debt of 125,000 borrowers, with 53,000 getting relief under the Public Service Loan Forgiveness program, 51,000 through an IDR plan and 22,000 who have a total or permanent disability.
Those on the IDR plan have been making payments for more than 20 years but never got the student debt relief they were promised, according to the White House. The Public Service Loan Forgiveness program includes those who have been working in a government position or nonprofit for more than 10 years.
The relief helps only a small portion of student loan borrowers as more than 45 million people still hold $1.75 trillion in student loans, while college prices continue to increase.
“For years, millions of eligible borrowers were unable to access the student debt relief they qualified for, but that’s all changed thanks to President Biden and this Administration’s relentless efforts to fix the broken student loan system,” Secretary of Education Miguel Cardona said.
“The Biden-Harris administration’s laser-like focus on reducing red tape, addressing past administrative failures, and putting borrowers first have now resulted in a historic $127 billion in debt relief approved for nearly 3.6 million borrowers. Today’s announcement builds on everything our administration has already done to protect students from unaffordable debt, make repayment more affordable, and ensure that investments in higher education pay off for students and working families,” he added.
The announcement comes after the administration released its initial policy considerations for its next step in student debt relief through the negotiated rulemaking process.
The administration is looking at how it can help borrowers whose balances are greater than what they originally owed; borrowers who are eligible for relief under specific programs but didn’t apply; those under financial hardship; and those who went through programs that didn’t give financial value.
The first meeting to consider the initial policy considerations will occur Oct. 10 and Oct. 11.
“My administration will continue to use every tool at our disposal to relieve the burden of student debt so more Americans can be free to achieve their dreams. It’s good for our economy. It’s good for our country and it’s going to change their lives,” Biden said in a speech Wednesday.
—Updated at 1:53 p.m.