Another 74,000 US borrowers will have their student loan debt forgiven – a total of nearly $5bn, the White House announced on Friday.
Many of these borrowers are public service workers, such as firefighters, nurses and teachers. They qualify to have their student loans forgiven because of 10 or more years of service.
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Of the group, 30,000 have been paying back their student loans for at least 20 years.
The total number of borrowers with forgiven student loans in the Biden program now totals 3.7 million Americans, the administration said.
“From day one of my administration, I vowed to improve the student loan system so that a higher education provides Americans with opportunity and prosperity – not unmanageable burdens of student loan debt,” Joe Biden said in a statement. The US president added: “I won’t back down from using every tool at our disposal to get student loan borrowers the relief they need to reach their dreams.”
The current program is a reduced version of the administration’s original plan to forgive student loans.
Before taking office, Biden promised to forgive $430bn of federal student loans for nearly 40 million borrowers. Under that plan, $20,000 per person of federal student debt would have been forgiven for borrowers who were Pell grant recipients and up to $10,000 of debt would have been forgiven for other borrowers making less than $125,000 annually as individuals or $250,000 as a married couple.
Many Republicans argued that plan was an abuse of executive authority and made without congressional approval.
Six Republican-led states – Arkansas, Iowa, Kansas, Missouri, Nebraska and South Carolina – sued the Biden administration. The case, Biden v Nebraska, went all the way to the US supreme court and last June the court ruled against the Biden administration.
The Department of Education last August announced a less ambitious plan called Saving on a Valuable Education (Save). The scheme includes an income-driven repayment plan to lower monthly payments, and eliminating minimum monthly payments for lower-income borrowers. The cost of these loans would also match the amount taken out originally, rather than ballooning due to accruing interest.
Student loan repayments, which were paused during the Covid-19 pandemic and again several times while the program was being litigated, resumed in October.
