Biden announces forgiveness of $3.1 trillion in student loan debt

Biden announces launch of student loan forgiveness application

The Obama administration will forgive about $3.1 trillion in student loan debt — over 20 percent of the total amount — next week, Vice President Joe Biden announced Tuesday.

In a speech at the Council on Foreign Relations in New York, Biden said that the administration will forgive the majority of the loans, over $2 billion, for 25 million borrowers.

“It will become possible for many of you to get rid of the burden and the shame of having to go back to school because of an unpaid debt. Many of you will be able to graduate from college with a degree — the same degree you received, if you do the right things, when you were still in high school,” Biden said.

“This is such a critical moment in America,” Biden said. “We’ve seen the incredible economic prosperity and the jobs that are leaving our shores at a record pace. For the first time in decades, we will produce more jobs than we lost.”

The vice president’s announcement comes a month after the Department of Education first offered loans forgiveness to borrowers who had participated in the “Pay As You Earn” plan, which has been replaced by the government’s “Graduation with Good Standing” program.

“For many students, their first impulse in life has always been to take out debt to pay for higher education,” Biden said. “And in every generation, the number of people on the brink of drowning without it is overwhelming. Many more will be affected by programs like Pay As You Earn than by new technologies, new therapies, and new medicines.”

The vice president’s announcement of the program came days after the Treasury Department announced a similar plan that could wipe out up to $6.2 trillion in debt for nearly 47 million borrowers and save those students about $6,000 per year in interest charges.

Biden also announced that during the week of Jan. 8, 2016, colleges and universities that have issued graduates with a college-level degree will not be charged the interest normally added to the unpaid principal balance on loans they have granted, and will be able to pay the principal over

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