- Borrowers approved under the SAVE plan will receive emails from President Biden
- The Department of Education will identify eligible borrowers and cancel debt under the plan on a regular basis in the future.
- The administration has canceled nearly $138 billion in total student loan debt for nearly 3.9 million borrowers to date.
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 pay off their loans.
The move brings the total student loan debt canceled under the Biden administration 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 anticipated.
The Biden administration launched the SAVE plan after the Supreme Court last year blocked the president’s original $400 billion student loan cancellation plan in June. It is one of several alternative efforts the administration is working on to pay off student loan debt.
Education Secretary Miguel Cardona stands with President Biden at the White House after the Supreme Court blocked the president’s original $400 billion plan to cancel student loan debt.
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an income-driven repayment plan for borrowers who have been making payments for at least ten years and had originally withdrawn $12,000 or less for college.
For every $1,000 borrowed above that amount, borrowers can receive forgiveness after one additional year of payments. All SAVE plan borrowers receive forgiveness after 20 or 25 years, depending on whether they have graduate school loans.
President Biden is expected to address the latest cancellation of student loan debt during a stop in Los Angeles on Wednesday, where he will be joined by some of those benefiting from the plan.
Borrowers who have been approved for relief will begin receiving emails from Biden on Wednesday informing them and letting them know that they do not need to take any additional action.
To date, more than 7.5 million borrowers have enrolled in the SAVE plan, and more than 4.3 million have $0 in monthly payments. The Biden administration has touted it as the most affordable income-based repayment plan in history.
“This is truly a lifeline for borrowers,” Education Secretary Miguel Cardona said of the latest round of student loan debt forgiveness. “People receiving the debt relief announced today have sacrificed and saved for a decade or more to make their student loan payments.”
He stated that many beneficiaries of the SAVE plan come from low- and middle-income backgrounds.
The Biden administration has been working on several approaches to canceling student loan debt after the Supreme Court blocked the previous plan, including the launch of the SAVE plan and the rulemaking process.
For those who have been approved, borrowers will see it reflected in their accounts as student loan servicers begin processing debt cancellation in the coming days.
Going forward, the Department of Education will continue to periodically identify and cancel student loan debt under the plan.
Starting next week, the department will also begin sending emails to borrowers who may be eligible for forgiveness if they switch to the SAVE program.
To date, the Biden administration has canceled nearly $138 billion in student loan debt, as Americans hold more than $1.7 trillion in student loans.
Some of the actions the White House has taken include changes to the utility loan forgiveness and income-driven repayment programs. They have also canceled debts for more than one million borrowers who were defrauded by their schools and more than half a million borrowers with permanent disabilities.
But while President Biden has vowed to fight for more student loan debt to be canceled, his efforts have not been without criticism.
Some critics have criticized the move to cancel student loan debt, arguing that it burdens taxpayers who chose not to take out student loans or pursue expensive college degrees.