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Biden Administration Announces Another Student Loan Bailout

10% of all federal student loan borrowers have been approved for some kind of debt relief

Biden Administration Announces Another Student Loan Bailout

For the second time this week, the Biden administration is announcing another plan to forgive billions of dollars in student loan debt.

According to a press release from the Department of Education, officials have approved $7.4 million in debt relief for 277,000 borrowers.

The latest effort is another in a series of debt forgiveness actions pushed after the U.S. Supreme Court ruled last summer that the student-loan cancellation programs were illegal and that the Biden administration had overstepped its authority.

Individuals who will benefit signed up for the discharges under President Joe Biden’s Saving of a Valuable Education (SAVE) Plan, which the administration says has helped eight million people.

As it stands, 10 percent of all federal student loan borrowers have been approved for some kind of debt relief. Including this latest round of student loan debt cancellation, the administration says it has forgiven $153 billion for nearly 4.3 million Americans.

“Today we are helping 277,000 borrowers who have been making payments on their student loans for at least a decade,” U.S. Under Secretary of Education James Kvaal said in the release. “They have paid what they can afford, and they have earned loan forgiveness for the balance of their loan.”

On Monday, the administration said it had targeted more than 30 million Americans for relief under a program that would cancel up to $20,000 in accrued interest for borrowers whose balances are higher than when the loan began.

"I talked to a teacher in New York this week who took out a loan for $30,000," Education Secretary Miguel Cardona said Friday during a conference call with reporters. “And after over a decade of paying and being a teacher the debt was $60,000, and she was saying that the interest was so high that the payments that she was making wasn't even touching her principal."

The debt relief plan announced today is broken into three categories:

$3.6 billion for nearly 206,800 borrowers through SAVE

This relief will go to borrowers who are enrolled in the SAVE Plan who had smaller loans for their postsecondary studies. Borrowers can receive relief after at least 10 years of payments if they originally borrowed $12,000 or less for college. Each additional $1,000 in borrowing adds 12 more months until forgiveness. All borrowers on SAVE receive forgiveness after 20 or 25 years, depending on whether they have loans for graduate school.

$3.5 billion for 65,800 borrowers through administrative adjustments to Income-Driven Repayment (IDR) payment counts that have brought borrowers closer to forgiveness and address longstanding concerns with the misuse of forbearance by loan servicers.

$300 million for 4,600 borrowers through fixes to Public Service Loan Forgiveness (PSLF)

The Administration has now approved $62.8 billion in forgiveness for almost 876,000 borrowers through PSLF.

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