Biden Announces $9 Billion in Taxpayer-Funded Student Debt Cancellation
The Biden administration announced Wednesday that it was “cancelling” an additional $9 billion in student debt owed by Americans who borrowed money to attend college but had not yet repaid it.
There is, of course, no such thing as debt cancellation — debt isn’t cancelled; it’s only repaid by someone other than the borrower, in this case, the U.S. taxpayer, many of whom have already paid off their student loans.
According to the announcement, available here or in its entirety below, the figured announced Wednesday meant that the Biden administration had cancelled a total of “$127 billion for nearly 3.6 million Americans.”
According to the Education Data Initiative, total student debt in the U.S. amounts to approximately $1.766 trillion; the $9 billion in “debt relief” announced by the White House Wednesday is about one-half of 1 percent of that amount.
In addition, Wednesday’s announcement means that an additional 125,000 or so residents of the U.S. have seen some form of direct debt reduction (all U.S. taxpayers will see indirect debt increases to pay for these “cancellations”).
Those 125,000 represent approximately about one-quarter of 1 percent of the approximately 43.6 million borrowers still in debt because of federal student loans.
National student loan debt has more than tripled since 2006, according to the Education Data Initiative, with about 93 percent of that debt being federal and the other 7 percent owed to other lenders.
This latest effort at “debt relief” by the administration targets those who have served the public in some capacity (such as teaching), disabled borrowers and some with lower incomes.
“President Biden has long believed that college should be a ticket to the middle class, not a burden that weighs on families,” the statement read.
“That’s why from day one, his Administration has taken unprecedented steps to fix the broken student loan system, make college more affordable, and bring the promise of higher education in reach for more Americans,” it said.
Average student loan debt has risen more than tw0-and-a-half times faster than tuition in recent years, according to the Education Data Initiative.
The same source reported that 78 percent of Americans who identify as liberal support federal student loan “forgiveness,” while among conservatives, exactly half that number — 39 percent — support similar programs.
You can read the entire Oct. 4 media release from the White House briefing room website here:
President Biden has long believed that college should be a ticket to the middle class, not a burden that weighs on families. That’s why from day one, his Administration has taken unprecedented steps to fix the broken student loan system, make college more affordable, and bring the promise of higher education in reach for more Americans.
Marking a key step forward in that effort, President Biden is announcing that an additional 125,000 Americans have been approved for $9 billion in debt relief through fixes his Administration has made to income-driven repayment (IDR) and Public Service Loan Forgiveness, and by cancelling debt for borrowers with total and permanent disabilities. Today’s announcement brings the total approved debt cancellation by the Biden-Harris Administration to $127 billion for nearly 3.6 million Americans.
The Biden-Harris Administration is announcing it has approved:
- $5.2 billion in additional debt relief for 53,000 borrowers under Public Service Loan Forgiveness programs.
- Nearly $2.8 billion in new debt relief for nearly 51,000 borrowers through fixes to income-driven repayment. These are borrowers who made 20 years or more of payments but never got the relief they were entitled to.
- $1.2 billion for nearly 22,000 borrowers who have a total or permanent disability who have been identified and approved for discharge through a data match with the Social Security Administration.
The Department of Education is also releasing state-by-state totals of debt relief approved under the Biden-Harris Administration through fixes to IDR and Public Service Loan Forgiveness. Visit this link to see the state-by-state breakdown.
Today’s announcement builds on all that the Biden-Harris Administration has done to make college more affordable and ensure that student loans aren’t a barrier to opportunity for students and families. The Biden-Harris Administration earlier this year launched the most affordable student loan repayment plan – SAVE – which makes many borrowers’ monthly payments as low as $0 and prevents balances from growing because of unpaid interest. The Administration secured the largest increase to Pell Grants in a decade, and finalized new rules to protect borrowers from career programs that leave graduates with unaffordable debts or insufficient earnings. And, in the wake of the Supreme Court decision on the Administration’s original student debt relief plan, President Biden announced his Administration was pursuing an alternative path to debt relief through negotiated rulemaking under the Higher Education Act.
The Administration took an important step forward in the negotiated rulemaking process last week as the Department of Education announced individuals who will serve on the negotiating committee and released an issue paper to guide the first negotiating session. The paper asks the committee to consider how the Administration can help borrowers, including borrowers whose balances are greater than what they originally borrowed, those who would be eligible for relief under existing repayment plans but have not applied, and borrowers who have experienced financial hardship on their loans that the current loan system doesn’t address.
To date, the Biden-Harris Administration has approved $127 billion in debt cancellation for nearly 3.6 million borrowers, including:
Nearly $42 billion for almost 855,000 borrowers who are eligible for forgiveness through income-driven repayment by fixing historical inaccuracies in the count of payments that qualify toward forgiveness;
Almost $51 billion for 715,000 public servants through Public Service Loan Forgiveness programs;
$11.7 billion for almost 513,000 borrowers with a total and permanent disability; and
$22.5 billion for more than 1.3 million borrowers who were cheated by their schools, saw their institutions precipitously close, or are covered by related court settlements.
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