The Biden administration on Wednesday is canceling $1.2 billion in student debt for about 153,000 borrowers who took out relatively modest student loans and have been repaying it for the last decade or more.
A borrower can qualify for the forgiveness if they’re enrolled in the administration’s Saving on a Valuable Education (SAVE) repayment plan and “have been making at least 10 years of payments, and have originally taken out $12,000 or less for college,” a White House fact sheet said. It also said that “for every $1,000 borrowed above $12,000, a borrower can receive forgiveness after an additional year of payments.”
As an example, the fact sheet said, “a borrower enrolled in SAVE who took out $14,000 or less in federal loans to earn an associate’s degree in biotechnology would receive full debt relief starting this week if they have been in repayment for 12 years.”
Those who receive the relief are expected to receive an email with a message from President Joe Biden saying, “I hope this relief gives you a little more breathing room.”
“I’ve heard from countless people who have told me that relieving the burden of their student loan debt will allow them to support themselves and their families, buy their first home, start a small business, and move forward with life plans they’ve put on hold,” the email says.
The White House said Wednesday that 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.
Education Secretary Miguel Cardona told reporters Tuesday that the forgiveness will happen automatically and brings the total amount of student debt canceled by the Biden administration to nearly $138 billion for nearly 3.9 million borrowers.
“These are historic efforts that reflect the president’s commitment, again, to deliver as much relief as possible to as many borrowers as possible as quickly as possible,” he said. “Bottom line is this: 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 plans to directly contact other borrowers next week who are also eligible for early relief but are not enrolled in the SAVE plan, the White House said.
Biden said 7.5 million people are now enrolled in the plan of the 30 million who are eligible. The debt relief program was introduced last year after the Supreme Court struck down Biden’s original student debt relief program, which aimed to cancel up to $20,000 in debt for about 43 million borrowers.
