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The Biden administration announced on Wednesday that it is canceling $1.2 billion in student debt for about 153,000 borrowers who took out relatively modest student loans and have been repaying it for the last decade or more, and who were eligible under the Saving on a Valuable Education Plan (SAVE).
The SAVE program provides relief for people who have been making payments for more than 10 years on loans of $12,000 or less. According to a fact sheet from the White House, a borrower can qualify for the forgiveness if they’re enrolled in the SAVE repayment plan and “have been making at least 10 years of payments, and have originally taken out $12,000 or less for college.” It also said that “for every $1,000 borrowed above $12,000, a borrower can receive forgiveness after an additional year of payments.”
Borrowers will receive an email from President Joe Biden informing them their debts have been forgiven, with a message saying, “I hope this relief gives you a little more breathing room. I’ve heard from countless people who have told me that relieving the burden of their student loan debt will allow them to support themselves and their families, buy their first home, start a small business, and move forward with life plans they’ve put on hold.”
Education Secretary Miguel Cardona said: “With today’s announcement, we are once again sending a clear message to borrowers who had low balances: If you’ve been paying for a decade, you’ve done your part, you deserve relief … These are historic efforts that reflect the president’s commitment, again, to deliver as much relief as possible to as many borrowers as possible as quickly as possible. Bottom line is this: We’re providing real, immediate breathing room on an unacceptable reality where student loan payments compete with basic needs, like putting food on the table and accessing health care.”
The Education Department said that 7.5 million student loan borrowers have signed up for the SAVE plan and it will continue to process members as they meet the loan length and payment requirements. It added that borrowers eligible for forgiveness under the SAVE plan will automatically have their loans discharged without any action on their part moving forward.
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