The federal government announced the cancellation of an additional $7.4 billion in student loans on Friday.
This initiative, benefiting 277,000 borrowers, adds to a total of $154 billion of debt forgiveness that has been approved by the executive branch.
On Friday, the Department of Education announced it has approved extra loan cancellations for nearly 4.3 million student borrowers since 2021. The department explained that the most recent cancellation coincides with its Saving on a Valuable Education (SAVE) plan, which aims to ease the financial burden of low-income student borrowers.
“As long as there are people with overwhelming student loan debt competing with basic needs such as food and healthcare, we will remain relentless in our pursuit to bring relief to millions across the country,” the Department of Education Secretary Miguel Cardona said in the department’s press release.
The Department of Education has noted that at least 10% of student loan borrowers have received some form of relief since 2021. President Biden reaffirmed his dedication to addressing the student debt crisis, declaring, “I will never stop working to cancel student debt.”
However, the federal government’s efforts to cancel student loan debt have faced numerous legal challenges and criticism. Critics argue that loan forgiveness merely shifts the burden of payment to taxpayers.
Legal experts have raised concerns about the Department of Education’s authority to unilaterally cancel student loan debt. Last summer, the Supreme Court ruled against the department’s plan to cancel $10,000 of student debt for low-to-middle-income borrowers, citing a lack of legal authority under the Higher Education Relief Opportunities for Students Act (HEROES). The plan would have cost over $300 billion had it gone into effect.
