Biden Administration Announces $1.2 Billion Student Loan Forgiveness
In a move aimed at addressing the nation's staggering $1.77 trillion student debt, President Joe Biden's administration revealed on Wednesday the cancellation of $1.2 billion in student loans for approximately 153,000 borrowers.
The debt relief targets individuals enrolled in the Saving on a Valuable Education (SAVE) repayment plan, specifically those who borrowed $12,000 or less and have repaid for at least a decade. This announcement is part of a broader initiative by the White House, which has already forgiven around $138 billion in student debt for nearly 3.9 million people through various executive actions.
The SAVE plan, an income-driven repayment program launched by the Biden administration, stands out for its emphasis on assisting low-income borrowers. Unlike other income-driven plans, SAVE offers more favourable terms, with monthly payments based on income and family size. Notably, unpaid interest doesn't accumulate if borrowers meet their full monthly payment. The plan shortens the forgiveness period, requiring only 10 years of payments for those who borrowed $12,000 or less, with additional years per $1,000 borrowed beyond that threshold.
Borrowers qualifying for this latest round of debt forgiveness will receive email notifications from President Biden, requiring no further action. This move is a response to the Supreme Court's rejection of a broader student loan forgiveness plan last year, as the administration continues to explore alternative avenues to provide relief.
The Biden administration has been proactive in addressing student debt, cancelling loans through various programs, such as Public Service Loan Forgiveness (PSLF) and borrower defence to repayment for those defrauded by for-profit colleges. Additionally, the administration is conducting a recount of past payments to rectify "past administrative failures" and streamline debt relief for disabled borrowers. These actions, coupled with the latest student loan forgiveness, showcase ongoing efforts to ease the burden of student debt on millions of Americans.
