Biden Cancels More Student Loans Under New Plan
The Biden administration announced on Wednesday that it will be canceling $1.2 billion in student debt for approximately 153,000 borrowers. These borrowers have been making consistent payments on their relatively modest loans for at least a decade.
In order to qualify for this forgiveness, borrowers must be enrolled in the administration's Saving on a Valuable Education (SAVE) repayment plan. They must also have taken out $12,000 or less for their college education. For every additional $1,000 borrowed above $12,000, the borrower will be eligible for forgiveness after an additional year of repayment.
For example, a borrower who originally took out $14,000 in federal loans to earn an associate's degree in biotechnology would receive full debt relief if they have been in repayment for 12 years. The White House fact sheet also stated that those who receive the relief will be notified by email, with a message from President Biden expressing hope that the forgiveness will provide some "breathing room" for their financial situation.
This announcement comes as part of the Biden administration's efforts to alleviate the burden of student loan debt for millions of Americans. The Education Secretary, Miguel Cardona, stated that this latest round of forgiveness will bring the total amount of student debt canceled by the administration to nearly $138 billion, benefiting almost 3.9 million borrowers.
Cardona also emphasized that the forgiveness will happen automatically, and borrowers do not need to take any action to receive it. This process will bring relief to many who have struggled to keep up with their loan payments while also meeting basic needs such as housing, food, and healthcare.
Biden on student loan cancellation: “The Supreme Court blocked it. But that didn't stop me." pic.twitter.com/ZomPnhTU1k
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The Department of Education plans to directly contact eligible borrowers who are not currently enrolled in the SAVE plan next week. This will ensure that those who are eligible for early relief but not yet enrolled will still receive the benefits. The White House stated that the relief was originally scheduled for July but has been expedited by about six months.
President Biden has stated that this forgiveness will help to provide "real, immediate breathing room" for borrowers who have been struggling to make ends meet. He also expressed his commitment to providing as much relief as possible to as many borrowers as possible in a timely manner.
The student debt crisis has been a growing concern for many Americans, with the total amount of outstanding student loans surpassing $1.7 trillion. The Biden administration has been facing pressure from student advocates and progressive lawmakers to take more drastic measures to address this issue, including canceling up to $50,000 in student debt per borrower.
However, some critics argue that widespread debt forgiveness could disproportionately benefit higher-income individuals and may not address the root causes of the student debt crisis. There are also concerns about the potential impact on taxpayers, as any forgiveness of federal student loans ultimately comes at a cost to taxpayers.
Despite the debate surrounding student debt forgiveness, the Biden administration's latest announcement has been welcomed by many borrowers who will benefit from the relief. This round of cancellations will provide a significant financial reprieve for those who have been diligently making payments on their loans for many years.
This plan also serves as a reminder that the Biden administration is committed to addressing the issue of student debt and is taking action to provide some relief for borrowers. As the administration continues to grapple with this complex issue, it remains to be seen what additional measures may be taken in the future to alleviate the burden of student loan debt for millions of Americans.