Biden Announces More Student Loan Forgiveness, Bringing Debt Relief To Nearly 5 Million Borrowers

The Biden administration on Monday announced more federal student loan forgiveness, bringing the administration’s total student loan forgiveness to $183.6 billion for more than 5 million borrowers. 

The Details: The Department of Education announced several types of discharges on Monday including the approval of nearly 85,000 borrowers for $1.26 billion in student loan relief based upon borrower defense findings that the institutions had misled and cheated borrowers. 

The DOE also announced the approval of 6,100 borrowers for $465 million through Public Service Loan Forgiveness Second and $2.5 billion in relief for 61,000 borrowers with a total and permanent disability.

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"Four years ago, President Biden made a promise to fix a broken student loan system. Today, life-changing student debt relief is possible for more than five million borrowers—more than any other administration in history," said U.S. Secretary of Education Miguel Cardona. 

"Thanks to our tireless and unapologetic efforts to work toward a system that is affordable and accountable to both students and taxpayers, today's announcement includes additional relief for borrowers misled and cheated by their institutions, borrowers with disabilities, as well as additional loan forgiveness for public servants," Cardona added. 

Student Loan Servicers: The latest round of student loan forgiveness could have repercussions for loan providers including SoFi Technologies, Inc. SOFI, Navient Corp. NAVI and SLM Corp. SLM. 

Student loan servicers could lose revenue in the form of interest income and fees related to the latest loan discharges. 

Additionally, the rollout of forgiveness programs often requires servicers to update systems, retrain staff and manage complex transitions, all of which would increase expenses.

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