Topline
Another 153,000 student loan borrowers will have their debts forgiven, totaling $1.2 billion in relief, the Biden administration announced Wednesday, the first round of student loan forgiveness under a new program designed to help borrowers facing financial hardship.
Key Facts
Borrowers enrolled in the Saving on a Valuable Education (SAVE) plan will be notified this week whether they are among those affected by the debt cancellation, which will impact borrowers who have been making payments for at least 10 years after taking out $12,000 or less in student loans, the White House said.
Borrowers notified about their debt cancellation won’t need to take any additional steps to receive loan forgiveness, the Education Department said, adding student loan servicers will start discharging debt relief in “the coming days.”
For every $1,000 borrowed over $12,000, those enrolled in the SAVE program can receive forgiveness after an additional year of payments, according to the Education Department.
Crucial Quote
Education Secretary Miguel Cordona said Tuesday the plan aims to “deliver as much relief as possible to as many borrowers as possible,” adding the Biden administration hopes to provide “real, immediate breathing room from an unacceptable reality where student loan payments compete with basic needs.”
Big Number
$137.8 billion. That’s the total amount of student debt the Biden administration has canceled, according to the White House. About 3.9 million borrowers have been affected by the cancellations. Of the 40 million people with federal student loan debt, about 7.5 million are enrolled in SAVE, according to the Education Department.
Key Background
The Biden administration opened enrollment for the SAVE program in August. Under the new plan, borrowers’ monthly payments are tied to their income and family size, and loans are forgiven after 10 or more years of consistent payments. The program was formally launched after the Supreme Court rejected President Joe Biden’s more sweeping plan to immediately cancel at least $10,000 in student loans for all borrowers who make less than $125,000, adding up to about $400 billion in student loan debt.
Tangent
About 74,000 borrowers had their student debt—totaling about $5 billion—canceled last month, a decision that largely affected public servants under the Public Service Loan Forgiveness program.
