US Markets
Wednesday, February 21st, 2024 3:28 pm EDT
Key Points
- The Biden administration announced forgiveness of $1.2 billion in student debt for nearly 153,000 borrowers under the new repayment program, known as the Saving on a Valuable Education (SAVE) plan.
- Relief is targeted at borrowers who have been in repayment for a decade or longer and initially borrowed $12,000 or less.
- Unlike traditional income-driven repayment plans, such as SAVE, which usually require 20 or 25 years of payments for debt forgiveness, the SAVE plan allows borrowers with lower loan amounts to have their debt canceled after just ten years.
The Biden administration announced on Wednesday its intention to forgive $1.2 billion in student debt for nearly 153,000 borrowers enrolled in the new repayment program, known as the Saving on a Valuable Education (SAVE) plan. This relief is targeted towards borrowers who have been in repayment for a decade or longer and initially borrowed $12,000 or less. Typically, debt forgiveness occurs under income-driven repayment plans after 20 or 25 years of payments. However, under the SAVE plan, borrowers with lower loan amounts can have their debt canceled after just ten years. This move follows the administration’s commitment in January to initiate debt forgiveness for borrowers enrolled in the new plan. U.S. Secretary of Education Miguel Cardona emphasized the significance of providing relief to borrowers with low balances who have diligently made payments for a decade, stating that they deserve this assistance. Eligible borrowers are expected to receive emails from President Joe Biden, and they do not need to take any further action to receive the relief, according to the U.S. Department of Education. Following the Supreme Court’s blockage of Biden’s broader student loan forgiveness plan last June, his administration has focused on utilizing existing authority to alleviate educational debt burdens. This recent announcement marks another step, with nearly 3.9 million borrowers having received debt cancellation totaling $138 billion in relief thus far.
For the full original article on CNBC, please click here: https://www.cnbc.com/2024/02/21/biden-to-forgive-1point2-billion-in-student-debt-for-150000-borrowers.html
