Biden cancels student debt for 150K borrowers

The Biden administration announced Wednesday it is forgiving a total of $1.2 billion in student debt for roughly 153,000 borrowers.

The relief comes through the Saving on a Valuable Education (SAVE) repayment plan, which made changes to income-driven repayment plans in the wake of a Supreme Court decision overturning President Biden’s more ambitious student loan debt cancellation plan.

The first batch of loan forgiveness through the SAVE plan was planned for July, but the Education Department identified eligible borrowers sooner.

“This plan reflects our unapologetic commitment to deliver as much relief as possible to as many borrowers as possible, as quickly as possible,” Education Secretary Miguel Cardona said on a Tuesday call with reporters. “We’re providing real, immediate breathing room from an unacceptable reality where student loan payments compete with basic needs.”

Under the SAVE plan, those who borrowed less than $12,000 can have their debt forgiven after 10 years of payments. The Education Department will reach out next week directly to borrowers who are eligible for relief but are not currently enrolled in the SAVE plan.

“We have more work to do to cancel even more student debt, but today is a good day and we applaud the administration for continuing to work with us to help working families and particularly minority communities free themselves from the burden of this crushing debt,” Senate Majority Leader Charles Schumer (D-N.Y.), who has urged Biden to be aggressive in forgiving student debt, said in a statement.

The White House has in recent months been rolling out additional announcements on student debt relief as Biden seeks to deliver on his problem to wipe out what millions of Americans owe in loans.

The Supreme Court last June struck down Biden’s original proposal to cancel $10,000 of student loans for low- and middle-income borrowers. 

The administration announced last week it will seek to give student debt forgiveness to those experiencing “hardship.”

The hardship category is one of five in Biden’s new student debt relief plan that is going through the negotiated rulemaking process, where relevant stakeholders come together to discuss and revise the president’s proposals before the final plan is determined. 

Updated at 1:35 p.m.