Biden administration to forgive $4.9 billion in student debt for 73,600 borrowers

Biden administration to forgive $4.9 billion in student debt for 73,600 borrowers, per CNBC.

The alleviation comes as a result of corrective measures undertaken by the U.S. Department of Education to address issues within its income-driven repayment plans and the Public Service Loan Forgiveness program.

U.S. Secretary of Education Miguel Cardona highlighted the administration's persistent efforts to rectify the flaws in the country's student loan system and eliminate barriers that had previously hindered borrowers from obtaining the student debt forgiveness they deserved.

Approximately $1.7 billion of the relief will benefit 29,700 borrowers enrolled in income-driven repayment plans, designed to lead to debt forgiveness after a specified period. However, historical challenges arose as loan servicers often failed to accurately track borrowers' payments.

Additionally, $3.2 billion in loan cancellation will be extended to 43,900 borrowers who have dedicated a decade or more to public service. The Public Service Loan Forgiveness program participants have faced obstacles in receiving promised debt erasure due to payment count errors and other issues.

The announcement did not specify the timeline for eligible borrowers to receive the relief.

The Biden administration has now canceled over $136 billion in student debt for more than 3.7 million Americans, according to the White House. While consumer advocates commend recent actions, they continue to advocate for more substantial measures.

President Joe Biden, during the 2020 presidential campaign, pledged to cancel a minimum of $10,000 of student debt per person. The cancellation of student debt, a pivotal promise, remains a crucial factor in Democratic support, as failure to deliver could impact the enthusiasm and engagement of young voters.

Biden's broader plan to cancel up to $400 billion in student debt for millions of Americans faced setbacks in June when the Supreme Court ruled that the president lacked the authority to direct the Education secretary to cancel such a significant amount without prior Congressional authorization.