President Joe Biden announced that his administration is automatically canceling federal student loans for nearly 153,000 borrowers as part of a new repayment plan called the SAVE program. The cancellations, originally scheduled to start in July, have been accelerated and will now begin in February. The first round of forgiveness will clear $1.2 billion in loans for borrowers who have paid their loans for 10 years and borrowed $12,000 or less. Biden emphasized the importance of relieving student loan debt for individuals and families to achieve their financial goals.
The president is currently on a campaign swing through California and is expected to highlight the SAVE plan during his speeches. He emphasized his efforts to help middle-class Americans and warned against the potential consequences of a win by former President Donald Trump in November. Biden asked his supporters to help secure a second term so that he could continue enacting an agenda that benefits American workers. The administration has received positive feedback from borrowers who see debt relief as a way to move forward with life plans that have been put on hold.
More than 7.5 million people have enrolled in the new repayment plan, which offers a faster path to debt forgiveness for eligible borrowers. Borrowers must have borrowed $12,000 or less for college, have made at least 10 years of payments, and be enrolled in the SAVE plan to qualify for cancellation. Those who took out more than $12,000 will also be eligible for cancellation but on a longer timeline based on the amount borrowed. Education Secretary Miguel Cardona emphasized that borrowers who have been paying for a decade deserve relief and support.
Biden announced the new repayment plan last year alongside a separate proposal to cancel up to $20,000 in loans for millions of Americans. While the Supreme Court struck down the mass cancellation plan, the repayment plan has not faced the same level of legal scrutiny. The plan is a modification of existing income-based repayment plans created by Congress over a decade ago. The administration is committed to providing relief for borrowers with low balances who have demonstrated their commitment by making payments over an extended period.
The SAVE program is part of Biden’s broader efforts to address student loan debt and support individuals and families in achieving financial stability. By automatically canceling federal student loans for eligible borrowers, the administration aims to alleviate the burden of debt and enable borrowers to pursue their goals and aspirations. The acceleration of loan forgiveness under the SAVE plan reflects the administration’s commitment to providing tangible assistance to those struggling with student loan repayment.
