This morning, the Biden administration is forgiving $1.2 billion in student debt for more than borrowers via Biden’s Saving on a Valuable Education (SAVE) plan.
The move is part of the White House’s mission to tackle the nation’s $1.77 trillion in student debt. Last year, the Supreme Court shut down the Biden administration’s attempt for a more sweeping forgiveness of student loans. The high court said Biden overreached when he instructed his Education secretary to cancel such a considerable amount of consumer debt without approval from Congress.
Since taking office, nearly $138 billion of federal student loan debt has been canceled for almost 3.9 million borrowers.
Starting today, the first round of folks who are enrolled in our SAVE student loan repayment plan who have paid their loans for 10 years and borrowed $12,000 or less will have their debt cancelled.
— President Biden (@POTUS) February 21, 2024
That’s 150,000 Americans and counting.
And we’re pushing to relieve more.
“‘Can the Secretary use his powers to abolish $430 billion in student loans, completely canceling loan balances for 20 million borrowers, as a pandemic winds down to its end?'” Chief Justice John Roberts wrote the majority opinion for Biden v. Nebraska. “We can’t believe the answer would be yes.”
A White House press release states that over four million borrowers have a $0 monthly payment under the SAVE Plan. Students who have been in repayment for a decade or longer and initially took out $12,000 or less will receive the much-needed relief.
“Last year, President Biden launched the SAVE plan – the most affordable repayment plan ever. Under the SAVE plan, monthly payments are based on a borrower’s income and family size, not their loan balance,” the message reads in part. “The SAVE plan ensures that if borrowers are making their monthly payments, their balances cannot grow because of unpaid interest. And, starting in July, undergraduate loan payments will be cut in half, capping a borrower’s loan payment at 5% of their discretionary income. Already, 7.5 million borrowers are enrolled in the SAVE Plan, and 4.3 million borrowers have a $0 monthly payment.”
“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,” U.S. Secretary of Education Miguel Cardona said in a statement.
