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When the Supreme Court struck down President Biden’s $400 billion plan to forgive up to $20,000 in federal student loan debt for 43 million borrowers, the prospect of substantive debt relief appeared to vanish. But then millions of borrowers received surprise notices that their federal student loans were being eliminated through other government relief programs, the New York Times reported. The Biden administration has wiped out loans totaling $127 billion for 3.6 million borrowers — the biggest wave of student debt cancellation since the government began backing educational loans more than 60 years ago. The cost of that relief is ultimately borne by taxpayers. The Education Department is the largest lender for Americans who borrow for higher education, and 43 million borrowers currently owe the government $1.6 trillion. The government profits from the interest that borrowers pay, but loan defaults and canceled debts offset that. The system is projected to run at a loss in most years. Many of the programs that the Biden administration is using have existed for years, sometimes decades, but were notoriously troubled, forcing borrowers to navigate complicated bureaucratic hurdles. By adjusting rules and temporarily waiving some requirements, Education Department officials have accelerated long-delayed relief.

The restart of student loan payments may already be straining borrowers. The Census Bureau found that 41.2% of adults reported difficulties paying household expenses in its latest household pulse survey that polled respondents from Sept. 20 to Oct. 2, YahooFinance.com reported. That was up from 37.3% from the previous two-week polling period between Aug. 23 to Sept. 4 and the highest share on record since the survey first began asking that question in August 2020. Specifically, "the difficulties with paying household expenses were concentrated among households with a college degree, making between $50,000 and $150,000, suggesting that restarting student loan payments is the source of increased financial stress for consumers," Torsten Slok, chief economist of Apollo Global Management, wrote this week. That data provides the earliest indications of the kind of impact those repayments — which started this month for nearly 27 million borrowers — could have on both households and the economy as a whole after the 43-month pause helped boost stability and allowed many borrowers to make financial strides.