The Biden administration has approved an additional $5 billion in debt cancelation for roughly 74,000 student loan borrowers, the White House said in a statement Friday.
President Biden said many of the borrowers impacted by his latest student loan debt handout are public sector workers, like teachers and firefighters, who will have their debt erased after 10 years of public service. Nearly 30,000 borrowers impacted have been in repayment for at least 20 years “but never got the relief they earned through income-driven repayment plans,” Biden said.
The latest round of student debt cancelation brings the total amount canceled under Biden to $136.6 billion for more than 3.7 million Americans, according to the Department of Education. It comes after the U.S. Supreme Court blocked Biden’s initial student loan handout last year, which would have cost more than $400 billion.
“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,” Biden said. “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.”
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The additional debt cancelation is the result of adjustments made by the Biden administration to the income-driven repayment forgiveness and Public Service Loan Forgiveness programs.
“The Biden-Harris Administration has worked relentlessly to fix our country’s broken student loan system and address the needless hurdles and administrative inaccuracies that, in the past, kept borrowers from getting the student debt forgiveness they deserved,” U.S. Secretary of Education Miguel Cardona said in a statement.
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“The nearly $5 billion in additional debt relief announced today will go to teachers, social workers, and other public servants whose service to our communities have earned them Public Service Loan Forgiveness, as well as borrowers qualifying for income-driven repayment forgiveness because their payments are for the first time being accurately accounted for.”
Friday’s announcement follows action taken by Biden last week for student loan borrowers enrolled in the Savings on Valuable Education (SAVE) plan. Borrowers enrolled in SAVE who took out less than $12,000 in loans and have been in repayment for 10 years will have their remaining debts zeroed out next month.
According to the Penn Wharton budget model, SAVE will incur a net cost of $475 billion over the 10-year budget window.
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In December, Biden approved another $4.8 billion in student debt cancelation for more than 80,000 borrowers.
Republicans have panned Biden’s student debt handouts, arguing that taxpayers will ultimately foot the bill for the president’s contributions to the $34 trillion national debt.
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“President Biden is downright desperate to buy votes before the election — so much so that he greenlights the Department of Education to dump even more kerosene on an already raging student debt fire,” said House Education Committee Chairwoman Virginia Foxx, R-N.C., in a statement released after the Biden administration’s SAVE plan announcement last week.
“It would surprise no one if the Department relied on infants playing with abacuses to balance its books — it is a complete and utter disaster. It’s clear that the Biden administration needs a good old-fashioned dose of fiscal common sense — all it knows how to do is spend like a drunken sailor,” Foxx said.
Fox Business’ Michael Dorgan contributed to this report.