Washington D.C., February 21, 2024 – In a move intended to bring relief to struggling borrowers, the Biden administration announced today that it will automatically forgive $1.2 billion in student debt for nearly 153,000 individuals enrolled in the Saving on a Valuable Education (SAVE) repayment plan. This marks the latest step in the administration’s ongoing efforts to address the rising tide of student loan debt in the United States.
Who Benefits?
The borrowers benefitting from this announcement are those who qualify for the shortened forgiveness timeline offered by the SAVE plan. This plan allows for debt cancellation after 10 years of on-time payments for those with loans of $12,000 or less. This provision is specifically designed to aid community college graduates and other borrowers with smaller debt burdens.
Significance of the Move:
This action brings the total amount of student debt forgiven under the Biden administration to nearly $138 billion for almost 3.9 million borrowers. The initiative highlights the administration’s commitment to tackling the student debt crisis, which has grown to over $1.6 trillion and burdens millions of Americans.
Reactions:
The announcement has drawn mixed reactions. Supporters of the move have applauded it as a positive step towards alleviating the financial strain on student loan borrowers and boosting economic mobility. Critics argue that the action does not go far enough and that broader forgiveness measures are needed.
Future Actions:
The Department of Education has stated that it will continue to identify and discharge additional borrowers eligible for debt relief under the SAVE plan. The administration is also facing pressure to pursue broader student loan forgiveness through executive action or legislation.
