Yes, President Joe Biden has cancelled $15 billion of student loans.
Here’s what you need to know — and what it means for your student loans.
For all the criticism about no wide-scale student loan cancellation, it’s important to note that Biden has cancelled $15 billion of student loans during his first year in office. That’s more than any other president, and more than 675,000 student loan borrowers have benefitted. Here is the breakdown:
- Borower Defense To Repayment: $1.5 billion
- Total and Permanent Disability: $7 billion
- ITT Tech Students: $1.3 billion
- Public Service Loan Forgiveness: $5 billion
This is only the beginning. Student loan borrowers can expect additional student loan cancellation at least through public service loan forgiveness, total and permanent disability and borrower defense to repayment, among other options.
Student loan relief brings more student loan cancellation
The $15 billion of student loan cancellation doesn’t even include billions of dollars more of student loan forgiveness that Biden, President Donald Trump and Congress provided through student loan relief. Congress passed the Cares Act, the $2.2 trillion stimulus package, in March 2020. That stimulus package provided record student loan relief, including temporary student loan forbearance, no new interest on federal student loans, and no collection of student loans in default. Since March 2020, student loan borrowers have been able to “count” non-payments of student loans each month toward student loan forgiveness programs such as income-driven repayment and public service loan forgiveness. Biden has extended student loan relief three times since becoming president. (Student loan borrowers will get $15 billion of student loan cancellation). In aggregate, the U.S. Department of Education estimates that student loan borrowers collectively have saved $5 billion each month as a result of student loan relief. When federal student loan payments restart on May 1, 2022, student loan borrowers will have saved more than $120 billion in student loan interest.
Is this enough student loan cancellation?
Advocates of wide-scale student loan cancellation — the concept of mass student loan forgiveness for all or most student loan borrowers — say there hasn’t been enough student loan cancellation. (Here’s who won’t get student loan forgiveness). While they welcome $15 billion of student loan forgiveness, they argue it’s miniscule relative to the total number of student loan borrowers and total outstanding student loan debt. For example, there are 45 million student loan borrowers who collectively owe $1.7 trillion of student loans. Biden has cancelled $15 billion of student loans for more than 670,000 student loan borrowers. On an absolute basis, $15 billion is a substantial amount of student loan forgiveness. Student loan forgiveness advocates note, however, that on a relative basis, student loan cancellation to date has fallen short. For example, student loan cancellation has benefitted only 1.5% of student loan borrowers and less than 1% of outstanding student loan debt. (Student loan forgiveness could be the reason Democrats lose the midterm elections).
Student loan forgiveness: Here’s what Biden said last week
During his first press conference this year, Biden was asked whether he still plans to cancel $10,000 of student loans for student loan borrowers. Biden has supported $10,000 of student loan forgiveness, but he has insisted he doesn’t have legal authority to cancel everyone’s student loan debt. (How federal student loans will change this year). Instead, Biden has called on Congress to cancel student loans for millions of student loan borrowers. Biden has said he will sign any legislation on student loan forgiveness that Congress sends him. That said, Biden didn’t answer the question on the press conference. In fairness, the question was part of a two-part question, and Biden answered the second question first. This was also the last question of the nearly two-hour press conference. While the Biden administration is considering various options for student loan repayment and student loan forgiveness, there’s no current indication that Biden plans to enact wide-scale student loan cancellation for all student loan borrowers.
As legislators and the White House determine the next steps for your student loans, take control of your student loan repayment.
Here are some smart ways to pay off student loans and save money: