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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