Biden Cancels $5B in Student Debt, Total Reaches $136.6B

So far, the Biden administration has canceled $136.6 billion in federal student loan debt.
Anna Helhoski
By Anna Helhoski 
Updated
Edited by Rick VanderKnyff

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Updated on Jan. 19.

Nearly 74,000 student loan borrowers joined the ranks of the millions of Americans who have seen their student debt canceled by the Biden Administration.

On Friday, the White House announced cancellation totaling $4.9 billion to borrowers. It’s the latest relief due to the administration’s fixes to existing forgiveness programs. Those adjustments have resulted in $136.6 billion in debt cancellation benefitting some 3.7 million borrowers.

While Biden’s plan to cancel student debt en masse was struck down by the Supreme Court in June, he said in a statement Friday that his administration is “continuing to pursue an alternative path to deliver student debt relief to as many borrowers as possible as quickly as possible.”

The majority of the relief from Friday’s actions will benefit public service workers with student debt and qualifying payment totals. Here’s the breakdown of Friday’s debt forgiveness:

  • 43,900 borrowers will receive a total of $3.2 billion in relief through improvements made to the Public Service Loan Forgiveness Program (PSLF). 

  • 29,700 borrowers will receive a total of $1.7 billion in relief through adjustments to income-driven repayment (IDR) plan counts.

The Biden administration has been on a mission to make student loan forgiveness easier to achieve via programs like PSLF and IDR. The existing programs previously didn't count payments that should have otherwise qualified toward the totals needed for forgiveness.

Fixes include an adjustment that counts every month borrowers ever spent in student loan repayment or on pause toward forgiveness under income-driven repayment — even if borrowers never enrolled in an IDR plan. It takes 20 or 25 years under IDR for borrowers to get their remaining debt canceled. The adjustment also increases the number of payments counted toward Public Service Loan Forgiveness, which happens after 10 years of payments.

The first major wave of relief under this automatic account adjustment began in August with debt cancellation totaling $39 billion for 804,000 borrowers. In October, Biden canceled $9 billion in debt for 125,000 borrowers.

How much student debt has been forgiven so far?

As of the second quarter of this year, there was at least $1.57 trillion in federal student loan debt, according to the Federal Reserve Bank of New York's most recent estimate.

So far, 3.7 million borrowers have had $136.6 billion in debt forgiven by the Biden administration, according to the White House. Here’s how cancellation has been distributed:

  • Approximately $45.7 billion for approximately 930,500 borrowers through an automatic adjustment to past payments under income-driven repayment plans, which forgives debt after 20 or 25 years worth of payments. 

  • About $56.7 billion for 793, 400 borrowers working in public service through the Public Service Loan Forgiveness Program. 

  • $11.7 billion for nearly 513,000 borrowers with a total and permanent disability.

  • $22.5 billion for more than 1.3 million borrowers who were defrauded by their schools or their schools closed. 

The White House has created a new state-by-state breakdown of debt forgiveness delivered to borrowers.

Biden’s efforts to bring about widespread student loan cancellation were blocked by the Supreme Court on June 30. The administration says it will pursue a “Plan B” through the Higher Education Act.

Photo by Kevin Dietsch/Getty News Images via Getty Images.

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