President Joe Biden announced on Wednesday that his administration has approved $9 billion in student debt relief for public service workers and people who have been paying off loans for decades, just days after student loan payments restarted for the first time in over three years.
The cancellation affects 125,000 borrowers, who are now receiving relief due to “fixes” to the Education Department’s income-driven repayment (IDR) and Public Service Loan Forgiveness (PSLF) programs, as well as additional relief for people with disabilities.
“President Biden has long believed that college should be a ticket to the middle class, not a burden that weighs on families,” the White House said in a statement. “That’s why from day one, his Administration has taken unprecedented steps to fix the broken student loan system, make college more affordable, and bring the promise of higher education in reach for more Americans.”
According to the White House, nearly $2.8 billion of the relief is going toward nearly 51,000 borrowers enrolled in IDR, or borrowers who have been making payments for 20 years or more, while $5.2 billion is being forgiven for 53,000 borrowers under PSLF. Nearly 22,000 borrowers with permanent disabilities, as identified by the Social Security Administration, have been approved for $1.2 billion in cancellation.
Debt activists have said that the additional relief is welcome, but not nearly enough to address the student loan crisis, amounting essentially to “nickels and dimes,” as the Debt Collective wrote on social media.
“Despite the Supreme Court’s ruling earlier this year, Biden still has the authority to broadly eliminate student debt — and today’s announcement once again shows this to be true,” said Braxton Brewington, spokesperson for the Debt Collective, in a statement shared with Truthout.
“As Biden resumes student debt payments for the first time in more than three years, borrowers around the country are desperate for the relief they were promised and are owed. Biden needs to move much faster on his attempts to deliver relief — and the overall amount needs to rise to the trillions, not just the billions,” Brewington continued.
Indeed, the administration’s announcement came just after student loan payments resumed on October 1, plunging many borrowers into financial hardship once again. Polls have found that the majority of borrowers are unsure if they’ll be able to afford to restart payments; in a poll by Morgan Stanley released in June, only 29 percent of student debtors said they were “confident” in their ability to begin paying their loans again without having to skimp on essentials or cut spending from other areas.
Meanwhile, the nation is facing increasing inequality and poverty following the expiration of other pandemic-related programs.
Last week, the Debt Collective called on Biden to reinstate the student loan payment pause ahead of the looming government shutdown, with Brewington saying that, “If the federal government shuts down, interest and payments on federal student debt should come to a halt too.” The shutdown was narrowly avoided over the weekend, and the government is once again teetering on the edge of shutdown with no long-term deal in place past next month and no speaker of the House.