Biden Administration Announces $1.2 Billion Student Debt Cancellation for Over 150,000 Borrowers

Jimmy Williams

The Biden Administration has approved the cancellation of another $1.2 billion in student debt for approximately 153,000 borrowers who have diligently repaid relatively modest student loans over the past decade or more.

This step is part of the administration’s commitment to address the challenges faced by student loan borrowers and follows the principles of the Saving on a Valuable Education (SAVE) repayment plan.

With this new action, the Biden-Harris Administration has now approved nearly $138 billion in student debt cancellation for almost 3.9 million borrowers through more than two dozen executive actions.

Borrowers qualifying for this forgiveness must be enrolled in the SAVE repayment plan, demonstrating at least ten years of consistent payments, and have initially borrowed $12,000 or less for their college education. According to a White House fact sheet, additional forgiveness is granted for every $1,000 borrowed above $12,000, with an extra year of payments required for eligibility.

For instance, the fact sheet provides an example: a borrower in the SAVE plan who borrowed $14,000 or less for an associate’s degree in biotechnology would receive complete debt relief after 12 years of repayment.

Recipients of this relief can anticipate receiving an email from President Joe Biden expressing his hope that this measure provides some much-needed financial relief. The email acknowledges the impact on borrowers’ lives, enabling them to support themselves and their families, pursue homeownership, start small businesses, and resume life plans that were put on hold due to financial constraints.

The White House announced that the relief, initially scheduled for July, is being implemented about six months earlier than planned. Education Secretary Miguel Cardona emphasized the historic nature of these efforts, bringing the total student debt canceled by the Biden administration to nearly $138 billion for close to 3.9 million borrowers.

Cardona highlighted the automatic nature of the forgiveness process, underscoring the administration’s commitment to delivering timely relief to borrowers facing financial challenges. He stated, “We’re providing real, immediate breathing room on an unacceptable reality where student loan payments compete with basic needs, like putting food on the table and accessing health care.”

The Department of Education intends to contact other eligible borrowers not enrolled in the SAVE plan directly next week, extending the scope of this relief initiative. President Biden, in a statement last month, noted that while 6.9 million people are currently enrolled in the plan, approximately 30 million people are eligible. This debt relief program was introduced after the Supreme Court invalidated Biden’s initial student debt relief program, which aimed to cancel up to $20,000 in debt for around 43 million borrowers.

 

 

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