The Biden Administration has announced approval to fast-tracking a move to cancel nearly $1.2 billion in student loan debt for 153,000 borrowers. This approval was announced In a fact sheet released on February 21, 2024, by the Biden White House.
The move comes as Biden is under pressure to do more to address student loan debt ahead of a contentious presidential re-election.
Biden White House Announcement
The Biden-Harris Administration fact sheet announced “The approval of $1.2 billion in student debt cancellation for almost 153,000 borrowers currently enrolled in the Saving on a Valuable Education (SAVE) repayment plan.” (via The White House)
This announcement hopes to make this relief available ahead of schedule for struggling student loan borrowers to better fulfill promises made by President Biden for his administration.
Executive Actions
The announcement by the Biden-Harris administration asserts that it has now approved nearly $138 billion in total student loan debt cancellation. This accomplishment has been carried out primarily through more than two dozen different Presidential executive orders and actions.
Biden has relied on executive actions to enact his agenda because of the difficulty of passing student loan debt reform through Congress and the possibility of it being overturned in US courts.
Who Qualifies?
According to the fact sheet, people can qualify for this latest round of debt forgiveness if they are part of the SAVE repayment plan. Borrowers must have also been repaying for their loans for at least ten years and have less than $12,000 total in student loans.
This provision was originally part of SAVE but wasn’t planned to take effect until July. The Biden administration says this relief will be available to qualifying borrowers “nearly six months ahead of schedule.” (via the White House)
Relief for Those With Over $12,000 in Debt
If a borrower has more than $12,000 in student loan debt then the relief will work a little differently.
According to The White House announcement “For every additional $1,000 a borrower initially borrowed, they will receive relief after an additional year of payments. For example, a borrower enrolled in SAVE who took out $14,000 or less in federal loans to earn an associate’s degree in biotechnology would receive full debt relief starting this week if they have been in repayment for 12 years.”
What is SAVE?
SAVE stands for Saving on a Valuable Education. The SAVE program is a repayment plan for struggling borrowers that can dramatically reduce monthly payments, even down to $0 per month.
According to a US Department of Education report from November, nearly 5.5 million borrowers were enrolled in the plan.
SAVE Benefits
Nearly 2.9 million people on the SAVE plan had $0 monthly payments, according to the US Department of Education in 2023. This number has now increased to four million borrowers, according to The White House.
The US Department of Education estimates the other borrowers on SAVE are saving about $102 a month or $1,224 per year. This plan replaced the previous plan called Revised Pay As You Earn (REPAYE) during the summer of 2023.
Fulfilling a Vow
The Biden White House announcement reaffirmed Biden’s promise to fix the student loan debt system for countless Americans.
“From Day One of his Administration, President Biden vowed to fix the student loan system and make sure higher education is a pathway to the middle class – not a barrier to opportunity,” the statement said. (via White House)
Forgiving More Debt Than Any President in US History
This announcement took a moment to praise the president for his efforts on student debt so far.
“Already, the President has canceled more student debt than any President in history – delivering life-changing relief to students and families – and has created the most affordable student loan repayment plan ever: the SAVE plan,” the statement said. (via The White House)
Republicans are Obstructing the President
The Biden-Harris Administration in this statement called out Republican lawmakers in Congress for standing in the way of student loan reforms and debt cancellation.
The statement said, “While Republicans in Congress and their allies try to block President Biden every step of the way, the Biden-Harris Administration continues to cancel student debt for millions of borrowers, and is leaving no stone unturned in the fight to give more borrowers breathing room on their student loans.” (via The White House)
Reaching Out Directly On The Same Day
The Biden-Harris Administration announced it will quickly reach out to borrowers to let them know if they are affected.
“The U.S. Department of Education (Department) identified nearly 153,000 borrowers who are enrolled in SAVE plan who will have their debt cancelled starting this week, and those borrowers will receive an email today from President Biden informing them of their imminent relief,” the statement said. (via The White House)
More E-mails Next Week
If a borrower doesn’t receive an email the day of the announcement, there are more emails planned for borrowers from the Department of Education.
According to The White House statement “Next week, the Department of Education will also be reaching out directly to borrowers who are eligible for early relief but not currently enrolled in the SAVE Plan to encourage them to enroll as soon as possible.”
