Biden announces $9 billion more in student loan forgiveness, and progress in debt relief

President Biden said Wednesday his administration has approved $9 billion more in student loan forgiveness as he pledged to continue to look for ways to deliver debt relief to borrowers despite opposition from conservatives.

“My administration will continue to use every tool at our disposal to help ease the burden of student debt so more Americans can be free to achieve their dreams,” Biden said during a briefing at the White House. “It’s good for our economy, it’s good for our country, and it’s going to change their lives.”

The debt cancellation announced Wednesday affects 125,000 borrowers benefiting from three existing federal relief programs. It comes as millions of people with federal student loans are resuming payments on their debt this month after a three-year pause because of the coronavirus pandemic.

The Biden administration has continued to pursue targeted debt relief after the president’s plan to forgive up to $20,000 in federal student loans for millions of borrowers faced legal challenges and was ultimately struck down by the Supreme Court. In the past two years, the administration has relaxed the rules or made adjustments to student debt relief programs for public servants, for defrauded students and for disabled borrowers. Years of mismanagement or exceedingly complex rules governing the programs had denied many borrowers a chance of having their loans forgiven.

The Education Department said Biden’s policy changes have resulted in nearly 3.6 million borrowers being approved for a total of $127 billion in debt cancellation.

For example, 855,000 borrowers who have been repaying their debt for more than two decades are now eligible for nearly $42 billion in loan cancellation through income-driven repayment plans after a fix to inaccurate counts in payments needed to qualify for relief. Separately, a data match with the Social Security Administration records means some 513,000 borrowers with a total and permanent disability have now been approved for an automatic debt discharge of $11.7 billion in federal student loans.

“I am heartened to see these programs begin to deliver relief for these borrowers,” said Persis Yu, deputy executive director at the Student Borrower Protection Center. “Just a couple of years ago, the number of borrowers who had their debts canceled under IDR was only 32. The fact that that number grew by more than 50,000 in just two months is incredible.”

The administration said it has also helped deliver almost $51 billion in loan cancellation for 715,000 public servants such as teachers or service members through Public Service Loan Forgiveness, which cancels outstanding federal student debt held by public servants after 10 years of on-time payments. In 2021, the Education Department said it would temporarily allow all payments that eligible borrowers made on federal student loans to count toward the forgiveness program, a move that helped bring scores of public servants to the finish line.

Republicans have blasted Biden’s policies as wasteful spending and questioned whether he is exceeding his authority - making an argument similar to the one used by opponents of the debt forgiveness plan struck down by the Supreme Court. Last month, Sen. Bill Cassidy of Louisiana, the ranking Republican on the Senate Health, Education, Labor and Pensions Committee, and Rep. Virginia Foxx (R-N.C.), chair of the House Education Committee, demanded the Education Department explain what legal authority it is using to alter standards for income-driven repayment (IDR) plans.

“The Department still refuses to share with Congress what statutory authority they are claiming to justify this expenditure of taxpayer dollars,” Cassidy said in a statement Wednesday. “This is part of a pattern of the Biden administration illegally acting without congressional approval, costing the American people hundreds of billions of dollars.”

Two groups, the Cato Institute and the Mackinac Center for Public Policy, filed a lawsuit in August to block Biden from canceling loans through the IDR adjustment. A federal judge dismissed the case weeks later.

“My administration is doing everything it can to deliver student debt relief to as many as we can, as fast as we can,” Biden said Wednesday. “This is in contrast to House Republicans who helped block the previous debt relief plan, nearly shut down the government over the extreme demands, which would have hurt hard-working families.”

Wednesday’s update on Biden’s debt relief efforts arrives as the Education Department is convening a panel of higher-education experts to negotiate a new student loan forgiveness rule, an alternative path to delivering the sweeping debt relief the Supreme Court blocked. The rulemaking process could take at least a year to produce a regulation, and the result is likely to face legal challenges.