Federal student loan debt has been canceled, totaling $136.6 billion, by the Biden administration so far.
Notice from the White House:
Joining the millions of Americans who have had their school debt forgiven by the Biden Administration are nearly 74,000 student loan debtors.
On Friday, the White House informed borrowers that $4.9 billion in cancellations had been made. The administration’s adjustments to the current forgiveness programs have resulted in this most recent respite. Approximately 3.7 million borrowers have benefited from the $136.6 billion in debt cancellation from such modifications.
As per Biden’s statement on Friday, the government is “continuing to pursue an alternative path for providing student debt relief to as many students as possible as quickly as possible,” even if the Supreme Court’s June verdict invalidated his proposal to cancel student loans.
Public servants with student loan debt and qualifying payment totals will benefit most from Friday’s moves. The debt forgiveness from Friday is broken out as follows:
- Upgrades to the Public Service Loan Forgiveness Program will assist 43,900 borrowers, totaling $3.2 billion (PSLF).
- A $1.7 billion relief to 29,700 debtors will be obtained by changes to the income-driven repayment (IDR) plan counts.
Biden Rejects $5 Billion in Student Loans:
Through initiatives like PSLF and IDR, the Biden administration has been working to make student loan forgiveness more accessible. Previously, payments that would have otherwise qualified were not included in the totals required for forgiveness under the existing schemes.
One of the fixes is a calculation that considers each month that borrowers have ever paid back their student loans or placed them on hold for forgiveness under income-driven repayment, even if they have never participated in an IDR plan. Under IDR, borrowers must wait 20 or 25 years to get the remaining debt discharged. When ten years of payments have passed, the adjustment also raises the total number of payments eligible for public service loan forgiveness.
In August, 804,000 debtors received the first significant wave of relief via this automated account adjustment, with $39 billion in debt canceled. Biden wrote off $9 billion in debt for 125,000 debtors in October.
To date, What is the Total Amount of Student Debt Forgiven?
Based on the most current estimate from the Federal Reserve Bank of New York, there was at least $1.57 trillion in federal student loan debt as of this year’s second quarter.
According to the White House, the Biden administration has reportedly erased $136.6 billion in debt for 3.7 million borrowers thus far. The distribution of cancelation is as follows:
- $45.7 billion for around 930,500 debtors via income-driven repayment programs that automatically modify previous payments and discharge debt after 20 or 25 years of payments.
- Seven hundred ninety-three thousand four hundred public service borrowers will receive about $56.7 billion through the Public Service Loan Forgiveness Program.
- $11.7 billion for about 513,000 debtors who are totally and irreversibly disabled.
- $22.5 billion was given to more than 1.3 million debtors whose schools closed or deceived them.
A fresh summary of debt forgiveness provided to debtors, broken down state by state, has been prepared by the White House.
The Supreme Court invalidated Biden’s attempts to enact a nationwide student loan forgiveness scheme on June 30. The administration claims that the Higher Education Act would be used to implement a “Plan B.”
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