Biden Administration is Forgiving $1.2 Billion, (Source: CBS News) The Biden Administration said Wednesday that it will automatically forgive $1.2 billion in college debt for 153,000 borrowers. Loan holders who will have their debts dismissed will get an email from President Joe Biden today advising them of the forgiveness, according to the Department of Education.
Biden Administration is Forgiving $1.2 Billion in Student Debt for 153,000 Borrowers. Here’s Who Qualifies
The debt relief is the White House’s latest effort to address the nation’s $1.77 trillion in student debt, following the Supreme Court’s decision last year to overturn the Biden administration’s plan for broad-based student loan forgiveness. That idea would have helped more than 40 million borrowers each pay off up to $20,000 in debt.
With this latest round, the Biden administration said that it had approved loan relief for roughly 3.9 million borrowers, many of whom have been repaying debt for decades. The 153,000 borrowers who qualify for the most recent debt forgiveness are those engaged in the Saving on a Valuable Education (SAVE) repayment plan who have made at least ten years of payments.
“[I]f you’ve been paying for a decade, you’ve done your part, and you deserve relief,” said US Secretary of Education Miguel Cardona in a statement.
Who is Eligible for This New Debt Forgiveness?
The Biden administration stated that 153,000 borrowers enrolled in the SAVE scheme are eligible. Those who are eligible have been in repayment programs for at least ten years and borrowed no more than $12,000 for education, according to the Education Department.
A borrower can earn forgiveness for every $1,000 borrowed more than $12,000 after an additional year of payments, according to the government.
What Steps Do Borrowers Need to Take?
There are none, according to the Education Department. People who receive a debt discharge will receive an email from Biden today informing them that their loan has been forgiven, and they do not need to take any additional action. According to the statement, servicers will process the forgiveness in the coming days, and borrowers’ accounts will reflect the forgiveness.
What is the SAVE plan?
The SAVE plan is an income-driven repayment program, or IDR, developed by the Biden administration. IDRs align a borrower’s monthly payment with their income, reducing their financial load.
The SAVE plan was created to address some issues with previous IDR programs, such as permitting interest to accumulate on a borrower’s loan. All SAVE borrowers can achieve forgiveness after 20 or 25 years of repayment, but the White House has created a shorter 10-year forgiveness period for those with lesser debt. Borrowers can apply for the SAVE program here.
How many people have enrolled in SAVE?
The Education Department announced Wednesday that 7.5 million borrowers are currently registered in SAVE. Approximately 4.3 million have a monthly payment of zero dollars.
