Biden-Harris Administration Clears $1.2 Billion in Student Loans, Boosting Relief Efforts

US Department of Education

WASHINGTON, D.C. — The Biden-Harris Administration recently announced an automatic discharge of $1.2 billion worth of loans. This move will benefit nearly 153,000 borrowers who are eligible under the shortened time to forgiveness benefit of President Biden’s Saving on a Valuable Education (SAVE) Plan.

The SAVE Plan, which was designed to alleviate the financial strain of student loan debt, currently has 7.5 million borrowers enrolled, of which 4.3 million have a $0 monthly payment. This latest development comes as part of the administration’s continued efforts to bring about meaningful reform to student loan repayment.

U.S. Secretary of Education Miguel Cardona said, “With [this] 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, and you deserve relief.”

The student loan system has long been under scrutiny for its complex rules and burdensome repayment terms. The Biden-Harris Administration has responded with a series of reforms aimed at simplifying the process and providing relief to borrowers. To date, loan forgiveness has been approved for nearly 3.9 million borrowers.

The recently announced loan discharge comes after President Biden’s January announcement that his administration would accelerate the shortened time to forgiveness component of the SAVE Plan, six months ahead of schedule. This decision aims to deliver relief to the borrowers as quickly as possible.

To be eligible for this forgiveness, a borrower must have been enrolled in the SAVE Plan, made at least 10 years of payments, and initially borrowed $12,000 or less for college. For every $1,000 borrowed above $12,000, a borrower can receive forgiveness after an additional year of payments. Regardless of the amount borrowed, all borrowers on the SAVE Plan receive forgiveness after 20 or 25 years, depending on whether they have loans for graduate school.

U.S. Under Secretary of Education James Kvaal highlighted the administration’s commitment to fixing the student loan system: “For too long the system did not work for borrowers, even when they were eligible for loan forgiveness. [The recent] announcement shows that President Biden’s commitment to student debt cancellation continues to deliver.”

Borrowers will begin receiving emails from President Biden notifying them of their approval for loan forgiveness. They need not take any further action to benefit from this relief. In the coming days, loan servicers will process the forgiveness, and borrowers will see their loans forgiven on their accounts. Going forward, borrowers who meet the eligibility criteria under the SAVE Plan will have their loans automatically discharged without needing to take any action.

The U.S. Department of Education will continue to identify and discharge loans regularly. Additionally, starting this week, the Department will start emailing borrowers who could become eligible for this forgiveness if they switch to the SAVE Plan.

This latest initiative sends a strong message of support to those grappling with student loan debt. It underscores the administration’s commitment to education and fairness, demonstrating that meaningful reform is not only possible but also underway. As the burden of student loan debt continues to weigh heavily on many individuals, this news offers hope for a more manageable future.

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