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Biden Administration to cancel $39 billion in student debt

The move affects 804,000 people and comes after the Supreme Court struck down the president’s plan to eliminate $400 billion in debt for tens of millions of borrowers

Iker Seisdedos
Manifestación ante el Tribunal Supremo de Washington para exigir el perdón de la deuda estudiantil
Demonstration in front of the Washington Supreme Court to demand forgiveness of student debt.Jacquelyn Martin (AP)

The United States Department of Education announced on Friday that it will cancel $39 billion in federal student loans, in a move that will benefit around 804,000 people.

“For far too long, borrowers fell through the cracks of a broken system,” said Education Secretary Miguel Cardona in a statement.

In his two and a half years in office, Biden is already the president who has forgiven the most debt in history. “I have long said that college should be a ticket to the middle class – not a burden that weighs down on families for decades,” said the president in a White House statement.

The announcement comes two weeks after the Supreme Court struck down the president’s plan to wipe away $400 billion in student loan debt for 43 million borrowers. The court argued that Biden did not have the authority to implement such a sweeping measure without congressional backing.

Following the Supreme Court’s ruling, Biden criticized the decision and announced that he would pursue “alternative paths” to achieve his purpose. “Republican lawmakers – who had no problem with the government forgiving millions of dollars of their own business loans – have tried everything they can to stop me from providing relief to hardworking Americans.” he said in a statement on Friday. “The hypocrisy is stunning, and the disregard for working and middle-class families is outrageous.”

The new, smaller debt relief plan announced on Friday affects individuals with federal loans tied directly to the Education Department and who enrolled in income-driven repayment plans. Years-long management failures have made these payments more onerous than necessary, something that the new plan seeks to correct.

Biden also announced that he will attempt to enact a different debt relief program under the 1965 Higher Education Act.

Since 1980, the cost of four-year degrees at public and private universities has tripled, even accounting for inflation. According to an analysis by the Department of Education based on a recent sample of college students, nearly one third of borrowers are in default yet lack a degree. Many of them were unable to complete their degree because the tuition fee was too high.

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