Biden Administration Cancels $9 Billion in Student Loans as Payments Restart

The White House canceled $9 billion in debt for 125,000 student loan borrowers.

The debt relief comes as student loan payments restart for Americans following a three-year hiatus that began during the pandemic.

The relief falls into three categories, according to a Wednesday (Oct. 4) press release from the President Joe Biden administration. There is $5.2 billion for 53,000 borrowers under Public Service Loan Forgiveness programs, as well as almost $2.8 billion for nearly 51,000 borrowers through changes to the government’s income-driven repayment policy.

“These are borrowers who made 20 years or more of payments but never got the relief they were entitled to,” the release said.

In addition, the White House has forgiven $1.2 billion for nearly 22,000 borrowers who have a total or permanent disability.

The administration has forgiven $127 billion in student loans to date, per the release, a fraction of the roughly $1.7 trillion owed by the nation’s student loan borrowers.

The announcement is good news for younger borrowers who are feeling mental strain over the resumption of student loan payments, as noted in the July “Consumer Inflation Sentiment Report: Back to School Means Back to Federal Loan Repayments” report.

According to PYMNTS Intelligence, these borrowers are less concerned about inflation and more about paying back student loans.

Around a quarter of all Generation Z, millennial and bridge millennial consumers reported being more worried about student loans than inflation, the study showed, a sign of the substantial weight these loans carry in their everyday lives.

PYMNTS Intelligence found that 43% of borrowers who were concerned about repayments believed their financial stability would suffer, while 36% worried about keeping up with monthly bills, and 35% were concerned about being able to cover everyday expenses.

“Resuming student loan repayments also means delaying other dreams and goals, with many individuals saying aspirations such as buying a home, getting married and having a baby will have to be put on hold as a result,” PYMNTS wrote in September.

Meanwhile, members of Generation X face a unique struggle as they often find themselves caring for both children and aging parents. This position, coupled with ongoing student debt repayments, has placed consumers in this age bracket in a tough financial situation.