KATHMANDU: The Biden administration has announced the cancellation of student loans for an additional 160,000 borrowers, utilizing existing programs to erase $7.7 billion in federal student debt. This move marks a continuation of efforts to alleviate the financial burden on Americans, with a total of $167 billion in student debt canceled for nearly 5 million borrowers under various initiatives.
President Biden reaffirmed his commitment to making higher education accessible and ensuring that student debt does not hinder economic mobility. The latest relief targets borrowers in three categories, including those enrolled in Biden's new income-driven repayment plan, earlier income-driven plans, and the Public Service Loan Forgiveness program.
The implementation of Biden's new payment plan, the SAVE Plan, offers a quicker path to loan forgiveness, with more borrowers becoming eligible for cancellation after 10 years of payments—a significant reduction from previous timelines. Despite legal challenges from Republican-led states, the cancellation progresses, addressing past errors that delayed relief for some borrowers.
The Education Department reports that one in 10 federal student loan borrowers has now received some form of debt relief, providing significant financial relief and easing the burden for many. While existing avenues continue to be utilized for loan cancellation, the administration also advocates for a new, one-time cancellation plan targeting over 30 million borrowers facing various financial challenges related to student loans.
