Washington: US President Joe Biden has cancelled more than a billion dollars in student loans for 153,000 people, the second wave of debt forgiveness designed to provide financial relief for “hard-working American families”.

Biden, who is on a three-day campaign swing through California, made the $US1.2 billion ($1.8 billion) announcement saying loan relief helps the greater economy.

“Too many Americans are still saddled with unsustainable debt in exchange for a college degree. When people have student debt relief, they buy homes. They start businesses, they contribute. They engage.”

The move is part of a program unveiled in January targeting Americans who borrowed $US12,000 or less and had been making payments for at least a decade. In total, nearly $US138 billion in debt has been lifted from the shoulders of 3.9 million voters ahead of the presidential election in November.

“A lot of people can’t even repay, and they try – they don’t miss payments, they work like the devil every month to pay the bills,” Biden said.

His initial plan to forgive $US400 billion in loans for 43 million ex-students was struck down by the US Supreme Court in June, but the administration has found a way to tackle individual loan programs – the latest, a plan known as Saving on a Valuable Education, or SAVE – to try to make good on his promise.

Lucky borrowers in the latest round will receive an email from the president letting them know. The email move is reminiscent of 2020, when then-president Donald Trump’s name appeared on COVID-19 stimulus cheques sent to Americans. Trump is closing in on the 2024 Republican nomination and a rematch with Biden.

US data shows 44 million borrowers owe a combined $US1.6 trillion in federal student loans. They are now one of the largest forms of consumer borrowing for Americans.