President Joe Biden made a significant announcement on Wednesday, approving $9 billion in student loan forgiveness for 125,000 Americans.
This relief comes as a result of his administration's reforms to various programs, including income-driven repayment plans and Public Service Loan Forgiveness.
Of the total aid, more than $5 billion will be allocated to 53,000 borrowers who have dedicated a decade or more to public service. An additional $2.8 billion of the forgiveness benefits 51,000 borrowers enrolled in income-driven repayment plans, and $1.2 billion will go to 22,000 borrowers with disabilities.
Experts suggest that this announcement is likely to boost Biden's chances for re-election, as he stands out for having forgiven more student loan debt than any previous president.
"By forgiving this student loan debt, Biden distinguishes himself from other candidates running for the nation's highest office," noted higher education expert Mark Kantrowitz.
This move comes several months after the Supreme Court rejected Biden's plan to cancel up to $20,000 in student debt for tens of millions of Americans. Following that setback, Biden expressed his commitment to finding alternative ways to provide relief to borrowers.
Astra Taylor, co-founder of the Debt Collective, a union for debtors, commended Biden for the $9 billion in aid but urged him to take further action.
"If the Department of Education can cancel this amount, it can cancel it all, going beyond the president's commitment to borrowers who are currently struggling with the chaotic return to repayment," Taylor said.
Federal student loan payments resumed on October 1 after a pause lasting more than three years.
Before the Supreme Court's ruling, Education Department Undersecretary James Kvaal had warned that if the administration couldn't implement Biden's extensive student loan forgiveness plan, delinquency and default rates could surge. More recently, the Consumer Financial Protection Bureau estimated that one in five student loan borrowers might face difficulties with the resumption of payments.
Biden also introduced a 12-month "on-ramp" to repayment, which will provide protection to borrowers from the most severe consequences of missed payments, including falling into delinquency.
Experts suggest that the timeline of these actions is partly political, as data on borrower hardship won't be available until after the 2024 presidential election.
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