Thousands more Americans will now benefit from a new round of student loan forgiveness President Joe Biden has passed in his final days in office.
Biden announced more than $600 million in student loan forgiveness for an additional 8,000 borrowers on Thursday.
Why It Matters
Biden has made student loan forgiveness an essential part of his presidential legacy, approving $188.8 billion in student loan forgiveness for 5.3 million borrowers.
However, as President-elect Donald Trump approaches Inauguration Day and Republicans are soon to gain a majority in Congress, Biden's student loan relief policies are in jeopardy.
What To Know
Biden's final round of student loan forgiveness will apply to more than 8,000 borrowers and erase over $600 million in debt.
Two different types of borrowers are now eligible for the debt relief: those who are entitled through the income-based repayment plan and former students at DeVry University.
In 2022, DeVry University was found to have "made widespread substantial misrepresentations about its job placement rates," according to the U.S. Department of Education.
Biden's previous student debt relief initiatives haven't been met without their fair share of legal challenges.
The Supreme Court blocked Biden's larger student debt relief initiative in 2023. Even with that legal block, Biden has been able to forgive $188.8 billion in student loan forgiveness for 5.3 million borrowers.
What People Are Saying
U.S. Secretary of Education Miguel Cardona in a statement: "Four years ago, President Biden made a promise to fix a broken student loan system. We rolled up our sleeves and, together, we fixed existing programs that had failed to deliver the relief they promised, took bold action on behalf of borrowers who had been cheated by their institutions, and brought financial breathing room to hardworking Americans."
Alex Beene, a financial literacy instructor for the University of Tennessee at Martin, told Newsweek: "The latest round of student forgiveness is applicable to students who qualify under the income-driven repayment plan after making so many payments and a select group who took out loans through DeVry University that was later found to be misleading in scope. In many ways, it's the final attempt at forgiving certain types of student loans under an administration that made debt forgiveness one of its top priorities."
Kevin Thompson, a finance expert and the founder and CEO of 9i Capital Group, told Newsweek: "Biden is trying to get as much money out before he leaves office because he knows that the new administration is likely to cut future spending in regards to forgiveness."
What Happens Next
Despite the legacy of student loan forgiveness that Biden is leaving behind, student borrowers are unlikely to see as much financial relief under Trump's presidency.
"The future for student borrowers doesn't look as promising," Beene said. "The incoming Trump administration is more than likely to scale back these efforts, though it remains to be seen to what extent."
Thompson echoed this sentiment: "There's 100 percent likelihood that all future benefits and current benefits will be challenged under the Trump administration."
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