By Stacy M. Brown, NNPA Newswire Senior National Correspondent
In a significant move to alleviate the burden of student debt, the Biden administration revealed on Wednesday its decision to automatically forgive $1.2 billion in student loans for 153,000 borrowers. Those eligible for debt relief are individuals enrolled in the Saving on a Valuable Education (SAVE) repayment plan who have diligently made payments for at least ten years.
The Department of Education said it would email those who will receive the debt cancellation today, another step in the administration’s ongoing efforts to address the nation’s staggering $1.77 trillion student debt crisis. The announcement comes after the Supreme Court invalidated the administration’s previous plan for widespread student loan forgiveness, which aimed to assist over 40 million borrowers in wiping away up to $20,000 in debt.
U.S. Secretary of Education Miguel Cardona emphasized the administration’s commitment to providing relief, stating, “If you’ve been paying for a decade, you’ve done your part, and you deserve relief.”
This latest move brings total approved loan relief to nearly 3.9 million borrowers, with a cumulative debt cancellation of almost $138 billion through various executive actions. The 153,000 qualifying borrowers represent the first group to benefit from the SAVE plan policy, which allows debt forgiveness after ten years of repayment for those who borrowed $12,000 or less in student loans.
Originally scheduled for July, the Biden-Harris Administration implemented this provision of the SAVE plan nearly six months ahead of schedule, which the White House said amplified its commitment to delivering swift relief to those who have faithfully repaid their loans.
Under the SAVE plan, borrowers enrolled in the program who have been in repayment for at least a decade and took out $12,000 or less in loans will receive immediate debt relief. The Department of Education identified and notified the nearly 153,000 borrowers enrolled in the SAVE plan who qualify for debt cancellation. Additional outreach will be conducted to encourage eligible borrowers not currently enrolled in SAVE to join the program.
The accelerated timeline for forgiveness is expected to particularly benefit community colleges and other borrowers with smaller loans, propelling them toward freedom from student debt faster than ever before. According to the Biden-Harris Administration, 85 percent of future community college borrowers under the SAVE plan will be debt-free within a decade.
Biden introduced the SAVE plan last year, which offers the most affordable repayment option ever by basing monthly payments on income and family size rather than loan balance. Additionally, the plan ensures that borrowers making monthly payments do not accumulate interest, and starting in July, undergraduate loan payments will be halved.
The White House Council of Economic Advisers released an issue brief today, highlighting the potential savings for low- and middle-income borrowers enrolled in SAVE due to interest and principal forgiveness. The Biden-Harris Administration’s track record of canceling student debt now includes nearly 3.9 million Americans receiving almost $138 billion in debt relief through various actions.
“The President remains dedicated to delivering debt relief to as many borrowers as possible, continuing to fight for comprehensive solutions to address student loan debt challenges,” officials stated in a Fact Sheet. “The administration has also taken historic steps to improve the student loan program, including significant increases in Pell Grants and reforms to the Public Service Loan Forgiveness program.” Borrowers interested in enrolling in SAVE can visit studentaid.gov/save for more information.
