On Wednesday, the Biden administration announced the cancellation of $1.2 billion in student debt for approximately 153,000 borrowers who have been diligently repaying relatively modest student loans for a decade or longer.
To be eligible for loan forgiveness, a borrower must be enrolled in the administration’s Saving on a Valuable Education (SAVE) repayment plan, have made a minimum of 10 years of payments, and initially borrowed $12,000 or less for college, according to a White House fact sheet.
It was also mentioned that for every $1,000 borrowed above $12,000, a borrower can qualify for forgiveness after an extra year of payments.
For instance, according to the fact sheet, a borrower enrolled in SAVE who borrowed $14,000 or less in federal loans to pursue an associate’s degree in biotechnology would qualify for complete debt relief if they have been repaying for 12 years.
Recipients of the relief can anticipate receiving an email with a message from President Joe Biden expressing, “I hope this relief gives you a little more breathing room.”
According to the email, many individuals have shared that eliminating their student loan debt would enable them to achieve various goals such as supporting themselves and their families, purchasing their first home, starting a small business, and pursuing life plans that have been postponed.
The relief provided under the plan, which was launched last summer, was originally planned for July and the loans are being canceled about six months early, according to a statement from the White House on Wednesday.
Biden’s Student Loan Forgiveness: $138 Billion Waived for 3.9 Million Borrowers
Education Secretary Miguel Cardona informed the press on Tuesday that the forgiveness will occur automatically, increasing the total student debt canceled by the Biden administration to almost $138 billion for around 3.9 million borrowers.
“These efforts are truly historic and demonstrate the president’s dedication to providing relief to as many borrowers as quickly as possible,” he stated. “The main point here is that we are offering tangible relief for a troubling situation where student loan payments are in direct competition with essential needs such as food and healthcare.”
The Department of Education intends to reach out to additional borrowers next week who qualify for early relief but are not currently enrolled in the SAVE plan, according to the White House.
Last month, Biden mentioned that 6.9 million individuals are currently enrolled in the plan, while 30 million people are eligible.
Last year, the debt relief program was implemented following the Supreme Court’s rejection of Biden’s initial student debt relief plan, which sought to eliminate up to $20,000 in debt for approximately 43 million borrowers.
