- Borrowers approved under the SAVE plan will receive emails from President Biden
- Going forward, the Ministry of Education will identify eligible borrowers on a regular basis and forgive debts under the plan
- The administration has forgiven a total of nearly $138 billion in student loans to date for nearly 3.9 million borrowers
The Biden administration on Wednesday forgave $1.2 billion in student debt for more than 150,000 borrowers as part of the White House’s aggressive plan to help Americans repay their loans.
The move brings the total student loan debt forgiven under Biden to nearly $138 billion for nearly 3.9 million borrowers since he took office.
Wednesday’s announcement marks the first group of borrowers to be approved for student loan relief under the Saving on A Valuable Education (SAVE) plan’s shortened repayment period and comes six months earlier than previously expected.
The Biden administration launched the SAVE plan after the Supreme Court blocked the president’s original $400 billion student loan cancellation plan in June last year. It is one of several alternative efforts the government is working on to cancel student loan debt.
Education Secretary Miguel Cardona stands next to President Biden at the White House after the Supreme Court blocked the president’s original $400 billion student loan forgiveness plan
Protesters gathered outside the Supreme Court when the court blocked President Biden’s previous student loan relief plan last June
The SAVE plan is an income-driven repayment plan for borrowers who have been making payments for at least ten years and originally withdrew $12,000 or less for college.
For every $1,000 borrowed above that, borrowers can receive forgiveness after an additional year of payments. All borrowers under the SAVE plan receive forgiveness after 20 or 25 years, depending on whether they have loans for graduate school.
President Biden is expected to discuss the latest student loan debt forgiveness during a stop in Los Angeles on Wednesday, where he will be joined by some of those benefiting from the plan.
Borrowers approved for relief will receive emails from Biden on Wednesday informing them and letting them know they don’t need to take any further action.
To date, more than 7.5 million borrowers have enrolled in the SAVE plan, with more than 4.3 million having $0 in monthly payments. The Biden administration has touted it as the most affordable, income-driven repayment plan in history.
“This is truly a lifeline for borrowers,” Education Secretary Miguel Cardona said of the latest round of student loan forgiveness. “The people receiving the debt relief announced today have sacrificed and saved for a decade or more to pay their student loans.”
He claimed that many recipients of the SAVE scheme come from lower and middle-income backgrounds.
The Biden administration has been working on several ways to cancel student loan debt after the Supreme Court blocked the previous plan, including launching the SAVE plan and going through the regulatory process.
For those approved, borrowers will see this reflected in their bills as student loan servicers begin processing debt forgiveness in the coming days.
Going forward, the Ministry of Education will continue to regularly identify and forgive student loan debt under the plan.
Starting next week, the department will also begin emailing borrowers who may qualify for forgiveness if they transition to the SAVE program.
To date, the Biden administration has forgiven nearly $138 billion in student loans, while Americans hold more than $1.7 trillion in student loans.
Some of the steps the White House has taken include changes to government loan forgiveness and income-driven repayment programs. They have also forgiven the debts of more than a million borrowers defrauded by their schools, and more than half a million borrowers with permanent disabilities.
But while President Biden has pledged to fight to cancel even more student debt, his efforts have not been without criticism.
Some critics have blasted the measure to forgive student loan debt, arguing that it comes at the expense of taxpayers who choose not to take out student loans or pursue an expensive college education.