The Biden administration announced plans Wednesday to forgive $1.2 billion in student loans for 153,000 borrowers participating in the Saving on a Valuable Education (SAVE) program.
Rolled out last summer in the wake of the Supreme Court’s rejection of an earlier plan that would have eliminated up to $20,000 in student loan debt for millions of borrowers, the SAVE program focuses on debt forgiveness for those who have been making payments on their loans for at least 10 years – a big reduction from the 20 or 25-year term previously required to qualify for forgiveness in most cases. Borrowers can claim up to $12,000 in debt forgiveness at the 10-year mark and earn an additional $1,000 in forgiveness for every year of payments after that.
Education Secretary Miguel Cardona said Tuesday that the latest round of student loan debt forgiveness reflects the Biden administration’s “unapologetic commitment to deliver as much relief as possible to as many borrowers as possible, as quickly as possible.” He added that the program provides “real, immediate breathing room from an unacceptable reality where student loan payments compete with basic needs.”
The Biden administration says the SAVE program will cost $156 billion in total, while the Congressional Budget Office estimated that a similar plan would cost roughly $230 billion over 10 years.
A personal message: With White House officials expressing frustration that President Joe Biden isn’t getting the credit he deserves for his economic program, which includes substantial amounts of student loan forgiveness, the Department of Education will make sure that all of those who have their debts forgiven will know whom to thank.
“Congratulations—all or a portion of your federal student loans will be forgiven because you qualify for early loan forgiveness under my Administration’s SAVE Plan,” says an email message from Biden that will be sent out to beneficiaries. “I hope this relief gives you a little more breathing room.” (Politico has a copy of the full message here.)
More than $100 billion forgiven so far: According to the White House, the current administration has now forgiven nearly $138 billion in student loan debt for about 3.9 million borrowers through a variety of programs. The U.S. Department of Education provided a breakdown of the major forgiveness efforts so far:
* $56.7 billion for more than 793,000 borrowers through fixes to the Public Service Loan Forgiveness program;
* $45.6 billion for 930,500 borrowers through improvements to income-driven repayment plans;
* $11.7 billion for 513,000 borrowers with a total and permanent disability;
* $22.5 billion for 1.3 million borrowers through closed school discharges, borrower defense and related court settlements.
