Here’s Who Qualifies for the New Student Loan Forgiveness Plan
Joe Biden announced Friday that federal student debt will be wiped out for millions of people, despite previous conservative attempts to stop him.
The Biden administration unveiled the Saving on a Valuable Education plan in August. The SAVE plan reduces millions of borrowers’ monthly payments based on their income and family size. The plan also caps interest accrual and forgives remaining balances after a certain number of years.
The new round of student loan forgiveness under the SAVE plan applies to borrowers who took out less than $12,000 in federal loans and have been paying off their balances for at least 10 years. They will have their remaining debt canceled in February.
This move, which comes nearly six months ahead of schedule, “will particularly help community college borrowers, low-income borrowers, and those struggling to repay their loans,” Biden said in a statement.
About 30 million people are eligible for the SAVE plan, but Biden said in his statement that just 6.9 million are currently enrolled. He did not give details on how many borrowers will see immediate benefits from the upcoming cancellations.
Biden has repeatedly pushed for increased student debt cancellation, despite pushback from conservatives. But the president has refused to give up: In July, his administration announced it was forgiving $39 billion in student debt.
The Biden administration counted payments for borrowers who had made partial or late payments, and for people who had paused their payments under certain circumstances, for instance if they were a student or unemployed, but continued to pay the interest. These types of payments previously went uncounted, according to the government.
Biden had originally proposed a plan to cancel up to $20,000 of student debt for up to 43 million people. But the ultraconservative Supreme Court ruled 6–3 against his plan in June.