Biden Cancels $1.2 Billion More In Student Debt For 153,000 Borrowers

On Wednesday, President Joe Biden announced that his administration is canceling $1.2 billion in student debt for roughly 153,000 borrowers.

The administration has had to explore every possible avenue to make good on campaign promises of student debt forgiveness after the Supreme Court struck down a sweeping debt relief plan proposed by the president in 2022.

To navigate these hurdles the Biden administration instituted the Saving on Valuable Education Plan, or SAVE plan. The SAVE plan is an arm of the income-driven repayment (IDR) plan, which was created under the College Cost Reduction and Access Act of 2007. IDR qualified borrowers for debt forgiveness after 20-25 years of payment. Biden’s new plan allows borrowers who took out smaller loans to be eligible for total debt relief after 10 years of payment.

U.S. Secretary of Education Miguel Cardona heralded the plan. “We are providing debt relief to people who need it the most. We are also addressing the root cause of the issue which is the cost of college is out of control,” Cardona said in a statement. “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.”

Debt relief under SAVE was not scheduled to begin until July, but the administration announced recently they were ahead of schedule and rolled the plan out in February. During a brief statement at a library in Culver City, California, Biden said, “My MAGA Republican friends in Congress, elected officials and special interests stepped in and sued us and the Supreme Court blocked it [his prior debt relief plan]. But that didn’t stop me.”

Now SAVE is implemented and borrowers with loans of less than $12,000, who have been paying for 10 years and our enrolled in the plan will find their balances zeroed out. The administration has also stated they will be reaching out to eligible borrowers who are not enrolled in the plan, informing them of the debt-relief opportunity.

Biden’s administration has now eliminated more Student Loan Debt than any previous president totaling nearly $138 billion in debt relief during his administration.

Article by Clark Franzman