Biden Forgives $600 Million in Student Debt in Final Round of Relief

(Bloomberg) -- President Joe Biden is canceling $600 million in student loans, the final round of his administration’s piecemeal debt forgiveness efforts after the Supreme Court blocked a sweeping plan to wipe away borrowers’ balances.

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The Education Department announced the move on Thursday, which will benefit about 4,550 students whose schools closed while they were enrolled and those participating in a federal income-driven repayment program. In total, the agency says it canceled $188.8 billion in loans for more than five million borrowers since Biden took office in a series of separate actions.

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The administration has moved to cancel loans through existing federal programs in the aftermath of a 2023 Supreme Court ruling that threw out a widespread plan to forgive an estimated $400 billion in student loans for more than 40 million Americans. That program would’ve benefited the majority of people with student debt, and canceled as much as $20,000 per person.

After losing in court, advocates pressured Biden to find another way to forgive loans, in an attempt put a dent in the country’s collective $1.7 trillion student debt burden. Biden officials attempted a “Plan B” that was narrower in scope, but which also faced legal challenges.

Republican lawmakers and attorneys general have panned Biden’s broader plans to forgive federal student loans. President-elect Donald Trump has called Biden’s actions “vile” and has suggested they are illegal. But Trump has not detailed what — if anything — he plans to do about student loans after he takes office on Monday.

Biden was wary of student-debt cancellation at the start of his term but eventually embraced an idea popularized by progressive icons, including Senator Bernie Sanders. Democratic factions pushed the idea, which they said could help mobilize voters to support the party in the presidential election.

Under Biden, the Education Department streamlined existing federal programs, such as public service loan forgiveness, to help more Americans qualify for relief after making payments for at least 10 years. A senior administration official said that the reforms made should endure after the president leaves office.

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