Although the Supreme Court blocked the president’s broad student loan cancellation plan last summer, providing relief to borrowers has continued to be a priority for the administration. President Joe Biden, alongside Education Secretary Miguel Cardona, speaks in the Roosevelt Room of the White House on June 30, 2023, in Washington, D.C.
The Education Department has announced the cancellation of $1.2 billion in federal student loan debt for 150,000 borrowers. This latest action adds to a series of cancellation notices, bringing the total debt erased under the Biden administration to $138 billion for 3.9 million borrowers.
“In today’s announcement, we are once again emphasizing to borrowers with low balances: if you’ve been diligently paying for a decade, you’ve fulfilled your obligation and deserve relief,” stated Education Secretary Miguel Cardona in a statement. “Under President Biden’s leadership, our Administration has now granted loan forgiveness to nearly 3.9 million borrowers, and our significant efforts to alleviate student debt are far from over.”
Starting Wednesday, eligible borrowers will receive notifications of their approval for debt cancellation, requiring no action on their part to erase the debt.
To qualify, borrowers must be enrolled in the administration’s new Saving on a Valuable Education (SAVE) Plan, have made payments for at least 10 years, and initially borrowed $12,000 or less for college. For each additional $1,000 borrowed above $12,000, borrowers can receive debt cancellation after an extra year of payments. Furthermore, all borrowers enrolled in the SAVE program will receive forgiveness after 20 or 25 years, depending on whether they have loans for graduate school.
Those meeting the criteria were slated to receive an email from President Biden reaffirming his dedication to addressing the issue.
Part of the letter reads, “I hope this relief offers you some much-needed breathing space. I’ve heard from numerous individuals who have shared that easing the weight of their student loan debt will enable them to provide for themselves and their families, purchase their first home, launch a small business, and pursue life goals they’ve postponed.”
Last month, the administration revealed its decision to expedite the loan cancellation process, originally scheduled for July.
According to a financial analysis conducted by the Education Department, the new plan is already achieving its intended goal of alleviating financial strain among those burdened with the most overwhelming debts.
