MARKET NEWS

By Justin Sink and Akayla Gardner

(Bloomberg) -- President Joe Biden on Friday announced plans to cancel student debt for about 55,000 public sector workers, as his administration pushes to zero out balances for more people in the final weeks of his administration.

The move — which represents the cancellation of $4.28 billion owed on federal loans — pushes the total number of individuals who have received relief under Biden administration programs to nearly 5 million, the White House said. In total, about $180 billion has been forgiven. 

“From day one of my administration, I promised to make sure that higher education is a ticket to the middle class, not a barrier to opportunity,” Biden said in a statement. “Because of our actions, millions of people across the country now have the breathing room to start businesses, save for retirement, and pursue life plans they had to put on hold because of the burden of student loan debt.”

Easing the burden of student debt was a key promise of Biden’s 2020 campaign, but he encountered several legal obstacles after taking office. The Supreme Court last year rejected his far-reaching proposal to slash debt for more than 40 million people, and the president’s alternative was recently blocked in federal court — at least temporarily.  

A separate initiative called the SAVE plan was also temporarily halted by a federal appeals court in August. That proposal was an income-driven repayment plan that would allow some low-income borrowers to make zero-dollar monthly payments and would cancel debt after 10 years of repayment.

Friday’s announcement came as part of a program that forgives the outstanding balance on loans of borrowers who have made 120 qualifying monthly payments and work in education, public health, law enforcement, emergency response, and other public sector jobs.

President-elect Donald Trump has criticized the administration’s campaign to forgive student debt, but hasn’t said if he would reimpose restrictions on existing programs.