Biden Cancels $39 Billion in Student Debt

Here’s What Happened:

On Friday, July 14, 2023, the Biden administration announced that it would cancel $39 billion in student debt for more than 800,000 borrowers. This is the result of a “fix” to income-driven repayment (IDR) plans, which cap payment requirements for lower-income borrowers and forgive their remaining balance after a set number of years.

Who makes the cut?

To be eligible for forgiveness, student loan holders must have made either 20 or 25 years of monthly IDR payments. The department said that this relief addresses “historical inaccuracies” in the count of payments that qualify for forgiveness under IDR plans.

Here’s What It Means:

This is the latest in a series of student loan relief measures that the Biden administration has taken. In total, the administration has provided over $116 billion in loan relief to over 3 million students.

The cancellation of $39 billion in student debt is a significant step forward in the fight to make college more affordable. It will help to relieve the burden of debt for hundreds of thousands of borrowers and give them a fresh start.

About E. J. McKay

E.J.McKay is a Shanghai-headquartered investment bank with a special focus on mergers & acquisitions. We are one of the most long standing independent investment banks in China, with core business of mergers & acquisitions and financing advisory.