Biden cancels $7B+ more in student-loan debt, but forgiveness is only half the battle
IOU pt. II… President Biden enacted the latest round of student-loan-forgiveness measures on Friday, wiping out $7.4B in debt. The cancellation — approved under existing programs — covers 277K Americans, many of whom had small loans (less than $12K) or had made over a decade of payments. It also benefited some teachers, librarians, and public safety workers who’d paid back loans for 10 years. With the election on the horizon, Biden has ramped up efforts to bring student-loan forgiveness back in the spotlight.
Last week: POTUS unveiled relief measures that would cut debts for 30M+ borrowers and forgive “runaway” interest (owing more in interest than the OG loan). If approved, Biden says it could go into effect this fall.
So far: The Biden admin has forgiven $153B in debt for 4.3M borrowers, but it’s a far cry from broad relief. 43M Americans still owe $1.6T in student loans.
Saved by the bills… Biden campaigned on his goal of providing $10K in broad student-loan forgiveness. But after the Supreme Court struck down his 2022 forgiveness program last year, the admin’s been trying to provide relief bit by bit. In August, POTUS unveiled the SAVE repayment plan, which aims to cut monthly payments for low-income borrowers. So far, it’s erased the balances of 153K enrollees. But in the past month, two groups of Republican-led states have filed federal lawsuits against SAVE, saying it’s expensive and controversial.
A Band Aid can’t fix a broken system… While debt forgiveness provides much-needed relief, it doesn’t address the long-term problem: college tuition and fees have more than doubled over the past 20 years — and were up 4% last year alone. Meanwhile, the new FAFSA financial-aid system has been plagued with delays and glitches. College enrollment’s dropping, and over half of Americans in a survey said a four-year degree isn’t worth the cost.