Today, President Biden 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. The Biden-Harris Administration has now approved nearly $138 billion in student debt cancellation for almost 3.9 million borrowers through more than two dozen executive actions.
SOURCE: Whitehouse.gov
The borrowers receiving relief are the first to benefit from a SAVE plan policy that provides debt forgiveness to borrowers who have been in repayment after as little as 10 years and took out $12,000 or less in student loans. Originally planned for July, the Biden-Harris Administration implemented this provision of SAVE and is providing relief to borrowers nearly six months ahead of schedule.
President Biden vowed to fix the student loan system at the beginning of his term, and to make sure higher education is a pathway to the middle class-– not a barrier to opportunity. Already, the President has cancelled more student debt than any President in history-– delivering lifechanging relief to students and families-– and has created the most affordable student loan repayment plan ever: the SAVE plan.
Under the SAVE plan, starting today, the Administration will be cancelling debt for borrowers who have enrolled, have been in repayment for at least 10 years and took out $12,000 or less in loans for college. 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. 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.
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.
This shortened time to forgiveness will particularly help community college and other borrowers with smaller loans and put many on track to being free of student debt faster than ever before. Under the Administration’s SAVE plan, 85 percent of future community college borrowers will be debt free within 10 years. The Department will continue to regularly identify and discharge other borrowers eligible for relief under this provision on SAVE.
Over four million borrowers have a $0 monthly payment under the SAVE Plan
Bide’s SAVE plan is the most affordable repayment plan ever implemented. Under the SAVE plan, monthly payments are based on a borrower’s income and family size– not their loan balance. 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.
Today, the White House Council of Economic Advisers released an issue brief highlighting how low and middle-income borrowers enrolled in SAVE could see significant saving in terms of interest saved over time and principal forgiven as a result of SAVE’s early forgiveness provisions.
President Biden’s Administration has approved student debt relief for nearly 3.9 million Americans through various actions
Today’s announcement builds on the Biden-Harris Administration’s track record of taking historic action to cancel student debt for millions of borrowers. Since taking office, the Biden-Harris Administration has approved debt cancellation for nearly 3.9 million Americans, totaling almost $138 billion in debt relief through various actions. This relief has given borrowers critical breathing room in their daily lives, allowing them to afford other expenses, buy homes, start businesses, or pursue dreams they had to put on hold because of the burden of student loan debt. President Biden remains committed to providing debt relief to as many borrowers as possible, and won’t stop fighting to deliver relief to more Americans.
The Biden-Harris Administration has also taken historic steps to improve the student loan program and make higher education more affordable for more Americans, including:
- * Achieving the largest increases in Pell Grants in over a decade to help families who earn less than $60,000 a year achieve their higher-education goals.
- * Fixing the Public Service Loan Forgiveness program so that borrowers who go into public service get the debt relief they’re entitled to under the law. Before President Biden took office, only 7,000 people ever received debt relief through PSLF. After fixing the program, the Biden-Harris Administration has now cancelled student loan debt for nearly 800,000 public service workers.
- * Cancelling student loan debt for more than 930,000 borrowers who have been in repayment for over 20 years but never got the relief they earned because of administrative failures with Income-Driven Repayment Plans.
- * Pursuing an alternative path to deliver student debt relief to as many borrowers as possible in the wake of the Supreme Court’s decision striking down the Administration’s original debt relief plan. Last week, the Department of Education released proposed regulatory text to cancel student debt for borrowers who are experiencing hardship paying back their student loans, and late last year released proposals to cancel student debt for borrowers who: owe more than they borrowed, first entered repayment 20 or 25 years ago, attended low quality programs, and who would be eligible for loan forgiveness through income-driven repayment programs like SAVE but have not applied.
- * Holding colleges accountable for leaving students with unaffordable debts.
It’s easy to enroll in SAVE. Borrowers should go to studentaid.gov/save to start saving.
