US Markets
Wednesday, October 4th, 2023 1:58 pm EDT
Key Points
- President Joe Biden has announced a plan to provide $9 billion in student loan forgiveness to benefit 125,000 Americans. This relief is a result of his administration’s efforts to fix various programs related to student loans, including income-driven repayment plans and Public Service Loan Forgiveness.
- The allocation of the $9 billion in forgiveness includes over $5 billion for borrowers who have worked in public service for a decade or more, $2.8 billion for those enrolled in income-driven repayment plans, and $1.2 billion for borrowers with disabilities. This announcement comes after the Supreme Court previously struck down Biden’s plan to cancel up to $20,000 in student debt for millions of Americans, leading to the pursuit of alternative paths to provide relief to student loan borrowers.
President Joe Biden has announced a plan to approve $9 billion in student loan forgiveness for 125,000 Americans. This relief is a result of his administration’s efforts to fix various programs, including income-driven repayment plans and Public Service Loan Forgiveness.
Here’s a breakdown of how the $9 billion will be allocated:
- More than $5 billion will be directed to 53,000 borrowers who have worked in public service for a decade or more.
- $2.8 billion of the forgiveness will benefit 51,000 borrowers enrolled in income-driven repayment plans.
- Another $1.2 billion of the loan cancellation will go to 22,000 borrowers with disabilities.
This announcement follows a setback earlier when the Supreme Court struck down Biden’s plan to cancel up to $20,000 in student debt for millions of Americans. In response, Biden pledged to explore alternative ways to provide relief to student loan borrowers.
Federal student loan payments resumed on October 1, 2023, after a pause that lasted for more than three years. Education Department Undersecretary James Kvaal had previously warned that if the administration couldn’t deliver on Biden’s ambitious student loan forgiveness plan, delinquency and default rates could increase significantly. Additionally, the Consumer Financial Protection Bureau estimated that one in five student loan borrowers could face difficulties with the resumption of payments.
For the full original article on CNBC, please click here: https://www.cnbc.com/2023/10/04/biden-cancels-9-billion-in-student-debt-for-125000-borrowers-.html
