According to a White House news statement, the Biden administration said early on Wednesday morning that it has authorized the cancellation of an additional $1.2 billion in federal student loan debt.
According to the latest announcement, debt would be waived for about 153,000 borrowers who are presently enrolled in the Saving on a Valuable Education repayment scheme.
The debt forgiveness option is available to SAVE-enrolled borrowers who took out no more than $12,000 and have been making monthly payments for a minimum of ten years. On the other hand, borrowers who borrowed more than $12,000 can potentially have their debt forgiven.
The White House said, “After an extra year of payments, a borrower will receive relief for every additional $1,000 they initially borrowed.” “For example, if a borrower enrolled in SAVE has been in repayment for 12 years and took out federal loans totaling $14,000 or less to obtain an associate’s degree in biotechnology, they will receive full debt help starting this week.”
As early as this week, qualified borrowers will start to have their debts canceled.
The Biden-Harris Administration executed this SAVE clause and is giving assistance to borrowers over six months ahead of schedule, the White House said. The original intention was for July.
“Aid community college and certain other borrowers with lesser debts and put many on pace to being free of student debt sooner than ever before” is the stated goal of the forgiveness proposal.
The White House stated, “85% of future community college borrowers will now be debt-free within a 10 year time frame under the Biden-Harris Administration’s SAVE plan.”
The Biden administration has thus far cancelled about $138 billion in federal student loans, and American taxpayers will be responsible for paying for them. Despite “Republicans in Congress and their supporters” trying to “obstruct” the administration “every step of the way,” the White House boasted that Biden “had erased more student debt than any President in history.”
According to the administration, “fixing the student loan system and making sure higher education is a bridge to the middle class” are the goals of its debt forgiveness proposal.
To get around the Supreme Court’s June ruling that struck down Biden’s proposal to cancel all federal student loans, the administration has been introducing a number of smaller but comparable debt forgiveness schemes.
The Biden administration declared in January that it would forgive 74,000 debtors’ federal student loan debt totaling more than $5 billion.
Millions of student loan debtors are refusing to make payments in the hopes that this will put pressure on the federal government to implement unilateral cancellations, according to a study conducted by Intelligent.com and published last month.
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