From Day One President Biden vowed to fix the Federal student loan program and make sure higher education is a ticket to the middle class – not a barrier to opportunity. To date, the Biden-Harris Administration has taken historic action to approve debt cancellation for 4 million borrowers, helping these borrowers get more breathing room in their daily lives, access economic mobility, buy homes, start businesses, and pursue their dreams. Today, President Biden is announcing his Administration’s new plans that, if finalized as proposed, would provide debt relief to over 30 million borrowers when combined with actions the Administration has taken over the last four years. These plans would not only help create more financial stability for millions of working and middle-class families, they would also help address the disproportionate debt burden on communities of color and advance racial equity.

These actions are expected to provide significant relief to Black and Latino borrowers, borrowers who attended community college, and borrowers who are financially vulnerable because they took out debt but never had the chance to complete their degree. Not only are Black students more likely to take on student loans than their white peers, but they also end up holding nearly twice as much debt as their white peers four years after graduation.  And Latino borrowers are also more likely to default on their student loans compared to white borrowers.

The plans President Biden is announcing today, if finalized as proposed, would deliver some amount of relief to:

  • Borrowers who owe more than they did at the start of repayment. Millions of borrowers across the country owe more than they did when they started repaying because of accrued and capitalized interest. Black and Latino borrowers are likelier to experience growth in their student loan balances due to excessive interest accumulation. Four years after graduation, Black bachelor’s degree borrowers on average owe more than they borrowed.
  • Borrowers who are otherwise eligible for loan forgiveness, but have not yet applied. Borrowers face administrative burdens with completing loan forgiveness applications. Many borrowers would receive automatic debt relief for loan forgiveness programs that they are eligible for but have not successfully applied for, such as the Saving on a Valuable Education (SAVE) Plan, Public Service Loan Forgiveness, or other forgiveness programs.
  • Borrowers who first entered repayment many years ago. Many borrowers are repaying their loans decades after leaving school. The Administration’s new plan would cancel debt for all borrowers with only undergraduate student debt who entered repayment 20 or more years ago and cancel loans for borrowers with any graduate student debt that first entered repayment 25 or more years ago.  
  • Borrowers who enrolled in low-financial-value programs. Thosewho attended institutions or programs that failed accountability measures or failed to provide students with sufficient financial value would be eligible for relief, including those whose institutions closed prior to the finalization of such determinations.  Black and Latino borrowers make up a disproportionately larger share of students enrolled in these programs.
  • Borrowers experiencing hardship paying back their loans. Millions of borrowers could be eligible for relief if they are experiencing hardship in their daily lives that prevent them from fully paying back their loans now or in the future. Black and Latino borrowers have higher default rates than white borrowers, undermining their ability to build generational wealth, start businesses, buy homes, and more.

The plans announced today would address the disproportionate debt burden on borrowers of color and other vulnerable borrowers.

Black borrowers

  • In order to afford a college education, Black families—already disadvantaged by generational wealth disparities—rely more heavily on student debt than white families do.
  • Twenty years after first enrolling in school, the typical Black borrower who started college in the 1995-96 school year still owed 95% of their original student debt.
  • After 20 years of starting school, just 26% of Black borrowers were able to pay off all of their loans.
  • A disproportionate number of students at for-profit colleges are Black, and many of these students have attended low-quality programs, leaving them with unaffordable debts and low prospects.

Latino Borrowers

  • Latino borrowers have lower household incomes and significantly less wealth than their white counterparts, causing them greater difficulty in paying off loans.
  • Latino students are also more likely not to complete college, making them more likely to have debt with no degree.
  • Latino borrowers are also more likely to default on their student loans compared to white borrowers, with 15% of those in repayment in default and 29% in serious delinquency.
  • Latino students are also a disproportionate number of students enrolled in for-profit programs.

Community college borrowers

  • Under the Biden-Harris Administration’s SAVE Plan, 85% of community college borrowers are projected to be debt-free within 10 years.
  • Latino students make up a disproportionately larger share of community college students, making up 23% of community college enrollees but only 18% of the overall undergraduate population.
  • The share of community college students who are Latino and Black students is also increasing, with 2023 community college enrollment increasing by 2.1% for Black students, 5.5% for Hispanic students, and decreasing by 2.0% for white students.

The plans announced today, together with the Administration’s past actions, will provide relief to more than 30 million borrowers.  These plans would fully eliminate accrued interest for 23 million borrowers, cancel the full amount of student debt for over 4 million borrowers, and provide more than 10 million borrowers with at least $5,000 in debt relief or more.  With disproportionately high debt burdens, Black and Latino borrowers will get substantial benefits from this relief.


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