The Biden administration has announced the cancellation of $1.2 billion in student debt for 153,000 American borrowers,” following a previous Supreme Court ruling blocking President Biden’s broader plan to cancel student debt for over 40 million Americans.
This cancellation specifically targets borrowers enrolled in the Saving on a Valuable Education (Save) repayment plan, who have been making payments for at least a decade and originally borrowed $12,000 or less for school.
The White House highlighted that this measure would particularly benefit community college and other borrowers with smaller loans, potentially accelerating their debt relief.
The Save repayment program, introduced by the Biden administration, calculates monthly payments based on income and family size rather than loan balance.
Eligible borrowers enrolled in this plan will now have their loan forgiveness expedited, with relief to be processed in the coming days.
President Biden has also shortened the forgiveness timeline for those with smaller balances, putting them on track for forgiveness within 10 years.
The Department of Education will reach out to those eligible for relief but not enrolled in the Save plan.
To date, President Biden has cancelled $138 billion of student debt for nearly 3.9 million individuals through executive actions.
However, the US still grapples with a staggering $1.77 trillion in student debt, with an average federal student loan debt exceeding $37,000 per person.
Last year, the Supreme Court ruled against a proposal by President Biden to cancel billions in student debt, deeming it an overreach of presidential authority.
If implemented, Biden’s plan could have forgiven up to $20,000 in debt for some borrowers.
Source-BBC
