The Biden administration has canceled a total of $1.2 billion in student debt as part of efforts to bolster the Saving on a Valuable Education (SAVE) Plan. This initiative is set to impact over 150,000 borrowers and aims to build upon previous loan forgiveness measures that have resulted in $138 billion in student debt cancellation for nearly 3.9 million borrowers.
U.S. Department of Education (ED) Secretary of Education Miguel Cardona said, "With today’s announcement, we are once again sending a clear message to borrowers who had low balances: if you’ve been paying for a decade, you’ve done your part, and you deserve relief." He further added, "Under President Biden’s leadership, our Administration has now approved loan forgiveness for nearly 3.9 million borrowers, and our historic fight to cancel student debt isn’t over yet."
According to an ED news release, there are currently 7.5 million borrowers enrolled in SAVE. Of this total, 4.3 million have a $0 monthly payment. In January, President Biden approved the rules of the SAVE Plan almost six months ahead of schedule. To be eligible for forgiveness under this plan, a borrower must be enrolled in the program and have received $12,000 or less for university education.
U.S. Under Secretary of Education James Kvaal stated, "As of today, we have approved loan relief for nearly 3.9 million borrowers who were counting on the Biden-Harris Administration to fix the broken student loan system and provide the forgiveness they earned and have been waiting for." Kvaal continued by saying that "For too long the system did not work for borrowers, even when they were eligible for loan forgiveness. Today’s announcement shows that President Biden’s commitment to student debt cancellation continues to deliver."
According to the news release, students eligible for this new round of forgiveness will receive emails from the White House informing them of their impending student loan relief. After 20 or 25 years, all borrowers on SAVE are expected to receive forgiveness, depending on whether they took out loans for graduate school. The forgiveness applies to the original principal balance of all federal loans and not what a student or former student currently owes.
