Student Loan Update: Thousands Receive Boost as $4.9 Billion Forgiven

The Biden administration announced on Friday that it will forgive almost $5 billion in student debt for some 74,000 borrowers.

The debt relief is a result of the U.S. Department of Education's fixes to its income-driven repayment plans and the Public Service Loan Forgiveness Program.

In a statement, President Joe Biden said almost 44,000 borrowers who will have their debt canceled are teachers, nurses, firefighters and others who earned forgiveness after 10 years of public service. Almost 30,000 of them are those who have been in repayment for at least 20 years but never got the relief they earned through income-driven repayment plans.

"My Administration is able to deliver relief to these borrowers—and millions more—because of fixes we made to broken student loan programs that were preventing borrowers from getting relief they were entitled to under the law," Biden said.

Biden said he had vowed to improve the student loan system so that higher education provides Americans with opportunity and prosperity, not unmanageable debt.

"I won't back down from using every tool at our disposal to get student loan borrowers the relief they need to reach their dreams," the president said.

vThe Biden administration is also pursuing another plan for widespread debt cancellation after the Supreme Court rejected the president's first plan last summer. That plan would have canceled up to $20,000 in federal student loans for those with annual incomes below $125,000 or couples with incomes below $250,000.

The Education Department has been working on a new proposal under a different legal authority that would provide relief to targeted groups of borrowers.

Last week, the Biden administration announced it would start canceling student loans for some borrowers in February as part of a new income-driven repayment plan.

Borrowers on the Saving on a Valuable Education (SAVE) repayment plan who initially took out $12,000 or less for college will see their debt canceled after 10 years of payments, the Department of Education said.

"Beyond being the most affordable student loan repayment plan ever available, the Biden-Harris Administration designed the SAVE Plan to put community college students and other low-balance borrowers on a faster track to debt forgiveness than ever before," Secretary of Education Miguel Cardona said in a statement last week.

"Our ability to deliver this relief to borrowers months ahead of schedule is a testament to the Biden Administration's commitment to delivering relief to as many borrowers as possible, as quickly as possible."

Update 01/19/24, 7:48 a.m. ET: This article was updated with additional information.