Biden erases $1.2B in student loan debt for borrowers on income-driven repayment plan

The Biden administration has decided to eliminate an additional $1.2 billion in student debt for over 150,000 borrowers.

An announcement by the Education Department on Wednesday revealed the latest round of loan forgiveness, targeting a specific group of borrowers enrolled in the Biden administration’s income-based repayment plan. This action brings the total amount of debt cancellation approved by Biden to $138 billion, benefiting nearly 4 million Americans. The news was announced a day before a group of federal negotiators was set to discuss additional plans for student debt relief.

“If you qualify, you’ll be hearing from me shortly,” President Joe Biden stated during a visit to a public library in Culver City, California, as part of a West Coast fundraising trip.

Eligible borrowers can expect their debt to be canceled in the coming days, as confirmed by the Education Department. The White House has begun sending notifications by email, signed by the president, to the qualifying borrowers. The relief will be processed by loan companies without requiring further action from the recipients.

This recent forgiveness initiative is a result of the Education Department accelerating the implementation of President Biden’s income-based repayment plan, known as Saving on a Valuable Education (SAVE). Originally, the relief was not expected until summer, as indicated in a document.

Read more: Education Department speeds up relief for some student loan borrowers on income-based plan

Thousands of eligible borrowers had to meet specific requirements to qualify for the debt cancellation. They needed to be enrolled in the SAVE program and have been repaying a federal student loan of $12,000 or less for at least 10 years.

This is not the first time President Biden has reached out directly to the millions of borrowers whose student debt the administration is canceling. A similar message was sent to nearly 1 million borrowers last fall.

Read more: Biden is forgiving millions in student loans. He wants all the credit.

The continuous announcements of loan forgiveness by the White House are part of a strategic move as Biden heads towards re-election. Despite opposition from congressional Republicans and legal challenges, the administration is pushing forward, citing research that shows Democrats and younger voters appreciate promises fulfilled regarding student debt relief.

During his fundraising trip, Biden criticized court challenges and Republican opposition to his student loan debt cancellation plans. He emphasized the administration’s efforts through the SAVE program, calling it “the most affordable repayment plan ever.”

Republicans have strongly opposed the president’s initiatives on student loan debt relief, with Sen. Bill Cassidy criticizing the latest loan forgiveness.

“This is unfair, manipulative and a cynical attempt to buy votes,” said the ranking member of the Senate’s education panel.

Biden maintains that canceling student debt has positive ripple effects beyond just those freed from monthly payments, emphasizing its potential to boost the economy and enhance community engagement.

Biden was introduced at an event by Dr. Jessica Saint-Paul, who shared how her student loans of over $144,000 were canceled after 18 years of repayment, describing the impact as “life-changing.”

More relief on the way? Do I qualify?

As part of Biden’s SAVE plan, approximately 4.3 million out of 7.5 million borrowers are currently not required to make any monthly payments.

The department is reviewing borrower accounts and will automatically cancel loan debt for those who meet the eligibility criteria, specifically those who have been paying down federal loans of $12,000 or less for at least a decade. This process will continue regularly.

Borrowers not enrolled in SAVE are not yet eligible for forgiveness, but the administration plans to reach out to potential qualifying participants to encourage them to sign up for the program.