On Wednesday, the Biden administration announced a significant step toward easing the burden of student debt, revealing plans to forgive $1.2 billion in outstanding loans.
This move will benefit nearly 153,000 borrowers who are enrolled in the newly introduced repayment initiative known as the Saving on a Valuable Education (SAVE) plan.
The debt relief will primarily target individuals who have diligently navigated repayment for over a decade and initially borrowed $12,000 or less. Traditionally, loan forgiveness under income-driven repayment schemes, such as SAVE, is granted after 20 to 25 years of consistent payments.
However, the SAVE plan offers a more expedited path to debt cancellation, particularly for those with smaller loan amounts, who can now qualify for forgiveness after just ten years.
Back in January, the Biden administration signaled its intent to commence the debt forgiveness process for participants of this innovative program.
U.S. Secretary of Education Miguel Cardona emphasized the administration’s commitment to acknowledging the efforts of borrowers with lower balances, asserting that a decade of repayment warrants tangible relief.
Eligible borrowers will soon find solace in their inboxes as President Joe Biden personally notifies them of their debt forgiveness status. Remarkably, recipients need not take any additional steps to access this relief, as confirmed by the U.S. Department of Education.
In the wake of the Supreme Court’s rejection of Biden’s comprehensive student loan forgiveness agenda last June, his administration has fervently explored avenues within its purview to alleviate the financial strain on borrowers.
This latest initiative marks another substantial milestone, with nearly 3.9 million borrowers benefiting from debt cancellation, totaling a staggering $138 billion in relief.
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