Student loan relief: $183.6 billion cancelled by Joe Biden, Trump plans review

UPDATED: Jan 13, 2025 22:25 IST

President Joe Biden has achieved a historic milestone by canceling student loans for over 5 million Americans — more than any other US president.

In a decisive move on Monday, the Education Department wiped out loans for 150,000 borrowers through pre-existing programs. Biden’s administration expanded these initiatives, leveraging them to their maximum potential, even after the Supreme Court blocked his ambitious forgiveness plan.

This approach underscores Biden's determination to alleviate student debt, utilizing every available mechanism to deliver relief to millions despite legal setbacks.

“My Administration has taken historic action to reduce the burden of student debt, hold bad actors accountable, and fight on behalf of students across the country,” Biden said in a written statement.

In total, the administration says it has waived $183.6 billion in student loans.

Reforms simplified eligibility, helping over 1 million public servants have their balances canceled under PSLF alone.

Focus shift after Supreme Court block

After the Supreme Court blocked Biden’s broad forgiveness plan for $20,000 per borrower, the administration redirected efforts to existing mechanisms to provide relief.

Most of Monday’s borrower defense cancellations were for students who attended several defunct colleges owned by Center for Excellence in Higher Education, including CollegeAmerica, Stevens-Henager College, and Independence University. They are based on past findings that the schools lied to prospective students about their employment prospects and the terms of private loans.

Political pushback from Republicans

Republicans criticized Biden’s policies, arguing they burden taxpayers and overstep presidential authority. Incoming President-elect Donald Trump is expected to roll back many of these changes.

Trump proposed eliminating PSLF during his first term in office, but Congress rejected the idea. Project 2025, a blueprint created by the Heritage Foundation for a second Trump term, proposes ending PSLF, and narrowing borrower defense and making repayment plans less generous than existing ones.

Republicans have suggested that reversing Biden’s changes will be a priority. Earlier this month, Rep. Virginia Foxx, R-N.C., issued a report blasting Biden’s expansion of borrower defense, saying he “tried to stretch every possible law” to fulfill his campaign promises.

(With inputs from AP)