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President Biden forgives close to $4 billion in student debt — what’s next?

 1 year ago
source link: https://finance.yahoo.com/news/president-biden-forgives-nearly-4-200000606.html
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President Biden forgives close to $4 billion in student debt — what’s next?

Lauren Bird
Thu, August 18, 2022, 1:00 AM·7 min read
President Biden forgives close to $4 billion in student debt — what’s next?
President Biden forgives close to $4 billion in student debt — what’s next?

President Joe Biden wiped $3.9 billion from the student loan records Tuesday.

More than 200,000 former students, who still owe on a federal student loan from their time at ITT Technical Institute will see their loan balances cleared, whether they’ve applied for forgiveness or not.

ITT Educational Services closed its campuses in 2016 after years of questioning and scrutiny of its accreditation standards and recruiting processes. At the time, the institution had about 45,000 students across 130 campuses.

Some of the former students were already eligible for federal student loans forgiveness but this move applies to all borrowers who took on debt attending the school between 2005 and September 2016, when the school closed.

This brings the total amount of loan discharges under Biden to nearly $32 billion and leaves many wondering what more could be forgiven or at least if payments will remain on pause.

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The pause has been helpful for millions

After mortgages, student loans make up the biggest chunk of household debt at more than $1.5 trillion, according to the Brookings Institution.

At the start of the pandemic, the government froze student loan repayments for most borrowers. In April, the White House extended the moratorium for the sixth time through to August 31.

“This pause will help 41 million people keep up with their monthly bills and meet their basic needs,” Vice President Kamala Harris said in an announcement. “It will give borrowers some urgently needed time to prepare for a return to repayment.”

A letter addressed to Biden and Secretary of Education Miguel Cardona and signed by more than 100 lawmakers highlighted those positive effects of the freeze.


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