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New round of student loan cancellations affect 12,000 more in Ohio

A student reads a book in a library.
Pixabay

Another 12,000 Ohioans will see their student loan debt canceled after the Biden administration announced a new round of debt forgiveness on Friday.

"We're proud of the fact that we're making a difference for working-class people in this country," U.S. Education Secretary Miguel Cardona told WOSU Friday morning.

Cardona said that brings the number of Ohioans with forgiven debt to 129,000 borrowers through the new repayment plan, totaling $5.75 billion.

The latest round of forgiveness is part of a new repayment plan that offers a quicker route to forgiveness.

More people are becoming eligible for student loan cancellation as they hit 10 years of payments, the Associated Press reported. That's a decade sooner than what borrowers faced in the past.

But two new lawsuits are challenging the plan’s legality. Two groups of Republican-led states, led by Kansas and Missouri, recently filed federal suits arguing that the Biden administration overstepped its authority in creating the repayment option.

The latest round of forgiveness affects an additional 277,000 nationwide and $7.4 billion in debt relief.

Cardona said that too many people have been left with debt and very little earning power. The new plan will help people get on their feet.

"We’re correcting the wrongs, introducing a new system," Cardona said.

On Monday, Biden laid out a proposal in Madison, Wisc., that would cancel at least some debt for more than 30 million Americans. The administration worked on the proposal for months after the Supreme Court rejected Biden’s first try at mass cancellation.

Biden ordered the Education Department to craft a new plan using a different legal authority.