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Over 150,000 student-loan borrowers enrolled in the Saving on a Valuable Education repayment plan will have their debt forgiven, President Joe Biden announced Wednesday.

The Biden-Harris administration will automatically discharge a total of $1.2 billion in loans, according to the White House release. This is the first group of borrowers to be approved for relief under the SAVE plan’s shortened repayment period, according to the United States Department of Education.

The administration has now approved loan forgiveness for nearly 3.9 million borrowers in its “historic fight” to cancel student debt, U.S. Secretary of Education Miguel Cardona said in the department’s press release.

“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,” Cardona said.

Borrowers enrolled in the SAVE plan, which replaced the Revised Pay As You Earn Plan in August, received an email from Biden Wednesday stating they are “approved for forgiveness and will not need to take any further action to receive relief,” the department’s release reads. The department wrote that student loan servicers will begin discharging the debt in the coming days.

To receive the relief, borrowers must be enrolled in the SAVE plan, have been in repayment for at least 10 years and have taken out $12,000 or less in loans. Next week, the Department of Education will be contacting borrowers who are eligible for early relief but are not yet enrolled, according to the release.

“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,” U.S. Under Secretary of Education James Kvaal said in the department’s release.

In January, the Biden-Harris administration announced the plan’s “shortened time to forgiveness” component would be accelerated, surpassing its self-imposed deadline by almost six months.

“This action will particularly help community college borrowers, low-income borrowers, and those struggling to repay their loans,” Biden said in a January statement. “It’s part of our ongoing efforts to act as quickly as possible to give more borrowers breathing room so they can get out from under the burden of student loan debt, move on with their lives and pursue their dreams.”

The Biden-Harris Administration plans to hold a session to discuss a proposal to provide loan forgiveness for borrowers experiencing hardship later this week, the release states. The administration is also writing proposed regulations that would increase eligibility for loan forgiveness.

“For too long the system did not work for borrowers, even when they were eligible for loan forgiveness,” Kvaal said. “Today’s announcement shows that President Biden’s commitment to student debt cancellation continues to deliver.”

Published on February 21, 2024 at 9:41 pm

Contact Kendall: kaluther@syr.edu