Biden Cancels $4.28 Billion in Student Debt as Presidency Ends

In a major victory for student-loan borrowers, President Joe Biden announced $4.28 billion in student-debt relief for 54,900 individuals under the Public Service Loan Forgiveness (PSLF) program. This announcement comes as Biden enters the final month of his presidency, leaving the future of such initiatives uncertain under President-elect Donald Trump’s administration. Mark Hoffman/Milwaukee Journal Sentinel via USA TODAY Network / USA TODAY NETWORK via Imagn Images

The newly approved relief is part of the Department of Education’s ongoing efforts to reform PSLF, which forgives the federal student loans of public service workers, including teachers, first responders, and nonprofit employees, after 10 years of qualifying payments. The reforms include a waiver that expired in October 2022, which allowed payments previously considered ineligible to count toward forgiveness. Original seal by the U.S. Army Heraldry Directorate / Wikimedia

“Four years ago, the Biden-Harris Administration made a pledge to America’s teachers, service members, nurses, first responders, and other public servants that we would fix the broken Public Service Loan Forgiveness Program, and I’m proud to say that we delivered,” said Education Secretary Miguel Cardona. United States Department of Education / Wikimedia

This latest cancellation brings the total student-loan forgiveness under Biden’s presidency to $180 billion, benefitting nearly 5 million borrowers. Of this amount, $78 billion has been directed to over 1 million PSLF participants, according to Business Insider. The administration’s commitment to tackling the nation’s $1.7 trillion student-debt crisis has provided significant relief to borrowers, many of whom faced mounting financial pressures. Mark Hoffman/Milwaukee Journal Sentinel via USA TODAY Network / USA TODAY NETWORK

Despite these successes, Biden’s broader student-loan relief efforts have faced significant challenges. His initial forgiveness plan, which aimed to cancel up to $20,000 in student debt for eligible borrowers, was struck down by the Supreme Court last summer. The administration’s alternative plan, known as Plan B, is currently stalled in court following legal challenges from Republican-led states. Mandi Wright / USA TODAY NETWORK via Imagn Images

Adding to the uncertainty, Biden’s income-driven repayment initiative, the SAVE plan, remains in limbo. The SAVE plan is designed to lower monthly payments and shorten the timeline for debt forgiveness, but its future also depends on the outcome of ongoing legal disputes. The Biden White House / Wikimedia

The transition to the Trump administration casts doubt on the continuation of these relief efforts. Preston Cooper, a senior fellow at the conservative-leaning American Enterprise Institute, commented on the stark contrast between Biden’s and Trump’s approaches to student debt. “Biden has taken a stance of, ‘We want to try and forgive as much debt as possible through various different programs.’ And to put it mildly, we’re not going to see that same attitude under the Trump administration,” Cooper told Business Insider. American Enterprise Institute

During his first term, Trump proposed eliminating the PSLF program, a move that would require congressional approval. With Republican control of both Congress and the White House, Trump may find greater success in pursuing such objectives. JASON BEAN/RGJ / USA TODAY NETWORK via Imagn Images

In a statement highlighting the impact of his administration’s efforts, Biden said, “From Day One of my Administration, I promised to make sure that higher education is a ticket to the middle class, not a barrier to opportunity. Because of our actions, millions of people across the country now have the breathing room to start businesses, save for retirement, and pursue life plans they had to put on hold because of the burden of student loan debt.” Mark Hoffman / Milwaukee Journal Sentinel / USA TODAY NETWORK