$1.2 billion of student loan debt is set to be forgiven by the Biden administration for over 150,000 borrowers, per an announcement Wednesday.
The repayment program, known as the SAVE (Saving on a Valuable Education) Plan is scheduled to aid borrowers who have been making regular payments for at least a decade. The threshold for loans taken out is $12,000 or less. With original enrollment into the plan taking place in Aug. 2023, the relief is set to take effect for full erasure of any existing debt for this demographic starting this week.
According to the White House’s website and ‘fact sheet’ concerning the announcement, borrowers will receive relief after continued payments year by year for every $1,000 taken out exceeding the $12,000 cap. As well, those who qualify for immediate relief will receive an email from the administration notifying them of their loan forgiveness, while those who qualify but are not currently enrolled in the SAVE plan will also be notified.
“This shortened time to forgiveness will particularly help community college and other borrowers with smaller loans and put many on track to being free of student debt faster than ever before,” the administration said in a statement.
With this latest action in effect, the Biden administration has canceled $138 billion in student debt for nearly 3.9 million borrowers nationwide. This development has surfaced after the Supreme Court blocked a more extensive and inclusive plan in 2023 to relieve $400 billion in loans for 43 million borrowers, aside from nearly two dozen other successful actions taken by the administration to provide forgiveness and relief to borrowers.
With presidential elections taking place this year, political analysts, advisors and members of the Democratic have commended the decision to push forward with nationwide debt relief, providing a positive benefit for the administration’s constituents who are more statistically likely to carry student debt than their Republican counterparts.
Currently, 7.5 million borrowers are enrolled in the SAVE Plan, and 4.3 million borrowers have a $0 monthly payment, according to the White House.
