Biden cancels student loan debt for 2,690 more Iowans

The Biden administration on Friday announced its cancellation of an additional $7.4 billion in student debt for 277,000 borrowers, including 2,690 more people in Iowa. 

Recipients of this latest round of debt relief will be notified by email Friday, according to the White House.

Roughly 206,800 borrowers enrolled in Biden’s SAVE plan, an income-driven repayment (IDR) program that the Biden administration created last year, will see their debt canceled due to Friday’s announcement.

Under the SAVE plan, borrowers are eligible for relief after they’ve made at least 10 years of payments and if they originally took out $12,000 or less in loans to pay for school. Borrowers with larger loans are eligible for debt forgiveness under the SAVE plan after 20 or 25 years of repayment, depending on what kinds of loans they have.

“An overwhelming number of those who qualify for SAVE were eligible for Pell grants and come from low- and middle-income communities,” Education Secretary Miguel Cardona told reporters on a conference call.

Another 65,700 borrowers enrolled in other IDR plans will see relief through “administrative adjustments” to their repayment plans in cases where certain loan servicers had made it more difficult for them to qualify for relief.

Those on an IDR plan have been making payments, but never got the relief they were promised, according to the White House. The Department of Education said in July that qualifying monthly payments that “should have moved borrowers closer to forgiveness were not accounted for,” effectively forcing these borrowers to make extra payments under their IDR plans.

Finally, 4,600 borrowers through the Public Service Loan Forgiveness (PSLF) program will see their debt canceled. Those getting relief under this program include individuals who have been working in a government or nonprofit position, such as a teacher, firefighter, or police officer, for more than 10 years.

Friday’s announcement is just the latest round of student debt cancellation enacted by the Biden administration, which has approved $153 billion in relief for more than 4.3 million people so far. That’s more than 9% of all outstanding federal student loan debt, and is more than any other administration in history.

In total, the Biden administration has approved $1.3 billion in debt cancellation for 31,130 people in Iowa. This includes those enrolled in the SAVE Plan, the Public Service Loan Forgiveness program, income-driven repayment plans, and those with total or permanent disability.

The announcement also comes just days after the administration unveiled new plans to relieve student debt for more than 30 million borrowers. 

“We are fixing a broken system,” Cardona said. “We’re relentless and taking steps to transform a broken system into one that works for people across the country.”

Biden’s efforts are facing opposition from Republicans, however, who could derail his plans, much like they did his initial wide-ranging student loan cancellation effort.

Republican attorneys general in 18 states are pushing to have Biden’s reformed SAVE plan tossed out in order to halt any further student debt cancellation. They claim, among many things, that the plan oversteps Biden’s authority, and that he’s circumventing the Supreme Court, which struck down the president’s initial widespread loan cancellation plan last year.

It’s unclear what these lawsuits could mean for loans that have already been canceled.