President Joe Biden announces $6bn student loan cancellation for 78,000 borrowers

In a major announcement on Thursday, US President Joe Biden revealed that $6 billion in student loans will be canceled for 78,000 borrowers, as part of his administration’s ongoing efforts to alleviate the burden of student debt. This recent action brings the total student debt cancellation under the Biden administration to an impressive nearly $150 billion, highlighting a firm commitment to tackling higher education debt in the United States.

This latest round of debt cancellation specifically targets public service workers, such as teachers, nurses, and firefighters, who are eligible under the Public Service Loan Forgiveness Program (PSLF). The PSLF, established in 2007, was designed to offer debt forgiveness to Americans dedicating their careers to public service. President Biden emphasized that these public service workers, despite their contributions to their communities, have previously missed out on the debt relief they legally deserve due to past administrative oversights.

The issue of student debt has been a growing concern, with approximately 43.4 million US student loan recipients owing a total of $1.63 trillion as of June 2023, as reported by the Federal Student Aid website. The escalation of higher education debt, which has tripled since the 2008 financial crisis, has placed significant financial strains on younger Americans, impacting their ability to purchase homes and make other critical investments. While Democrats have long advocated for government forgiveness of student loans, Republican opposition has largely stalled broader legislative action.

With the November re-election campaign on the horizon, Biden’s focus on student debt relief aligns with his strategy to garner support from younger voters. The President stated, “I won’t back down from using every tool at my disposal to deliver student debt relief to more Americans, and build an economy from the middle out and bottom up.” This commitment is further evidenced by the Biden administration’s cumulative debt cancellation amounting to $144 billion for nearly 4 million Americans.

This move by President Biden not only reinforces his dedication to addressing the student debt crisis but also underscores the political divide on how best to manage the growing issue of higher education financing in the US.