Biden Forgives Another $9 Billion in Student Loans

Biden Forgives Another  Billion in Student Loans

President Joe Biden has canceled another $9 billion in student loans. Kevin Deitch/Getty Images

President Joe Biden described $9 billion in new student-loan relief, which he said would provide a boost to the U.S. economy, as he sought to assure the administration that the administration is working to reduce Americans’ debt burdens.

„This type of relief is life-changing for individuals and their families, but it’s good for our economy as a whole,” Biden said at the White House on Wednesday.

„By freeing millions of Americans from the crushing burden of student debt, they can go and get their lives in order,” Biden added. “They may be thinking about buying a home, starting a business or starting a family. This is important. It is important in their daily lives.”

Biden campaigned on the issue of tackling the nation’s $1.7 trillion student-loan problem, and tried to solve the problem using other means after the Supreme Court struck down his $400 billion plan to provide relief to more than 40 million borrowers. That plan was popular with progressive, young and black voters, who helped Biden win in 2020 and are critical to his re-election bid. Play the video

The latest relief comes as millions of Americans resume student loan payments.

As the Covid-19 lockdowns began in 2020 by then-President Donald Trump, the payment bans were extended several times. This summer Biden and House Republicans agreed to allow those payments to resume as part of a deal on the nation’s debt ceiling. Interest started charging again on Sept. 1, and bills started arriving in October.

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A moratorium on student-loan repayments provided financial relief during the pandemic. Still, the restart threatens to further strain household budgets at a time when Americans say they are feeling the sting of high inflation and polls show they are worried about the overall state of the economy.

While the data shows a strong job market and resilient growth, the economy remains a political liability for Biden. Majorities of Americans say Republicans will do a better job of improving the economy, a Gallup poll On Tuesday, the party found its widest lead over Democrats in that measure in three decades.

The administration’s latest actions will provide relief to 125,000 borrowers, according to the White House, through changes to programs aimed at helping public employees, disabled Americans and low-income borrowers.

In total, public service loan forgiveness programs include $5.2 billion in loan relief for 53,000 borrowers.

The administration has identified 51,000 additional borrowers who have paid for at least 20 years but have not received relief and will provide them with nearly $2.8 billion in debt relief through income-based repayment adjustments.

And the White House said $1.2 billion in relief would go to about 22,000 borrowers who are considered totally or permanently disabled.

The moves bring the total debt relief approved by the administration to $127 billion, helping about 3.6 million Americans.

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