(NationRise.com) – President Joe Biden announced a plan on January 19th to forgive $5 billion worth of student loan debt for 73,600 borrowers. Nearly 44,000 of those loans have already been forgiven. They were primarily assigned to teachers, firemen, nurses, and others who qualified for the 10-year Public Loan Forgiveness program.
The remaining borrowers qualified after spending at least 20 years on a repayment program. This brings the number of Americans whose loans have been forgiven under the Biden administration to 3.7 million.
The announcement comes several months after the Supreme Court declared Biden’s previous student loan forgiveness proposal an overreach of federal authority. That plan would have forgiven up to $20,000 in student loan debt for millions of borrowers. The Supreme Court ruled that it was an overstep of government authority.
Republicans also argued that it would financially harm the United States. Several red states sued the administration to prevent the plan from passing. The federal government is expected to spend $7.1 trillion during Biden’s first four-year term.
President Biden also touted high Pell Grant numbers and new repayment plans based on income. He has previously said that his administration will work closely with the Department of Education to draft additional plans to cancel student loan debts.
Millions of Americans have begun participating in a “student loan strike” since payments resumed in October 2023. Only 60% of borrowers sent their new monthly payments at that time. Some experts believe delinquencies will continue to rise. However, some experts also continue blaming the fallout of COVID restrictions for many defaults.
Student loan debts have increased substantially in recent years to a new high of $1.6 trillion. The average balance has also tripled over the past three decades to a new high of $30,000. There are also more people with six-digit balances than ever before, representing 7% of all borrowers. A petition has been organized by The Debt Collective that allows borrowers to request that the Department of Education forgive their loans. Over 35,000 Americans have applied so far.
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