President Joe Biden announced plans on Monday to ease student debt that would benefit at least 23 million Americans, addressing a key issue for young voters whose support he needs as he seeks re-election in November.
Those plans include cancelling up to US$20,000 of accrued and capitalised interest for borrowers, regardless of income, which Biden’s administration estimates would eliminate the entirety of that interest for 23 million borrowers.
The latest round of debt relief affects 277,000 Americans enrolled in the SAVE Plan, other borrowers enrolled in Income-Driven Repayment plans, and borrowers receiving Public Service Loan Forgiveness, the White House said in a statement.
It follows an announcement in March that US$6 billion in student loans would be cancelled for 78,000 borrowers.
The administration said today it had approved US$153 billion in student debt relief for 4.3 million Americans.
Biden, a Democrat, last year pledged to find other avenues for tackling debt relief after the US Supreme Court in June blocked his broader plan to cancel US$430 billion in student loan debt.
The campaign of former president Donald Trump, Biden’s Republican challenger in the White House race, in March, criticised the student loan cancellation as a bailout that was done “without a single act of Congress.”
The issue remains high on the agenda of younger voters, many of whom have concerns about Biden’s foreign policy on the war in Gaza and fault him for not achieving greater debt forgiveness.
Republicans have called Biden’s student loan forgiveness approach an overreach of his authority and an unfair benefit to college-educated borrowers while other borrowers received no such relief.
Roughly half of federal student loan debt is held by people with a graduate degree, according to the Brookings Institution think tank. An August 2023 report by the department of education said graduate students received the highest share – 47% – of federal student loan disbursements from 2021-22, even though they accounted for only 21% of all borrowers.