160,500 more student-loan borrowers are getting $7.7 billion in 'much needed' debt cancellation

Ayelet Sheffey
·3 min read
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  • Biden announced another $7.7 billion in student-debt cancellation for 160,500 borrowers.

  • It's a result of fixes to PSLF and income-driven repayment plans, including the SAVE plan.

  • This means that one out of every 10 federal borrowers have now gotten debt relief.

Another batch of student-loan borrowers has been approved for debt relief.

On Wednesday, President Joe Biden's Education Department announced that it approved $7.7 billion in debt cancellation for 160,500 borrowers on Public Service Loan Forgiveness — which forgives student debt for government and nonprofit workers after 10 years of qualifying payments — or income-driven repayment plans.

Specifically, according to the announcement, 66,900 borrowers are receiving relief through fixes to PSLF, 54,300 borrowers are receiving relief through the SAVE income-driven repayment plan, and 39,200 borrowers are receiving relief through one-time account adjustments to bring payments on income-driven repayment plans up to date.

The relief through SAVE is a result of a new provision the Education Department implemented earlier this year. This provision forgives student debt for borrowers who originally took out $12,000 or less in student loans and made as few as 10 years of payments.

"Another 160,000 borrowers and their families will get some much-needed relief thanks to the continued efforts [of] the Biden-Harris Administration to fix the broken student loan system," Undersecretary of Education James Kvaal said in a statement. "We congratulate those borrowers on their due forgiveness and we will continue to work to deliver relief to others."

According to the department, this relief now means that more than one out of every 10 federal borrowers has been approved for debt cancellation.

Some impacted borrowers have already started receiving emails informing them of the relief, which, per the department, will be processed in the coming weeks.

There's still time for borrowers to benefit from some of the provisions that made this latest relief possible. The Education Department recently extended the deadline for borrowers to consolidate their loans to benefit from the one-time account adjustment, giving borrowers two extra months to take action before the adjustments are set to be completed in September.

In addition, the Education Department is in the process of implementing its broader student-loan forgiveness plan after the Supreme Court struck down the first one. It just concluded its public comment period, and the department said it will work to move quickly, with a goal to begin implementing the relief this fall.

While legal challenges are likely to arise — there have already been threats — Biden's administration has remained confident in its authority to continue relieving borrowers.

"From day one of my Administration, I promised to fight to ensure higher education is a ticket to the middle class, not a barrier to opportunity," Biden said in a statement. "I will never stop working to cancel student debt — no matter how many times Republican elected officials try to stop us."

Read the original article on Business Insider