President Joe Biden has announced a new initiative to cancel federal student loans, targeting borrowers with relatively small debts who have been in repayment for a decade or more.
According to NBC News, the announcement came on Friday, with Biden saying that borrowers who received less than $12,000 in federal loans and have been making payments for at least 10 years will have their remaining student debt canceled immediately, effective in February.
The SAVE Plan of the Joe Biden Administration
Joe Biden emphasized that this move is nearly six months ahead of schedule and applies specifically to borrowers enrolled in the new income-driven repayment plan called SAVE.
According to the administration officials, this initiative is a way to help borrowers lower their monthly payments. While approximately 30 million people qualify for the SAVE plan, Biden noted that 6.9 million are presently enrolled.
However, the exact count of borrowers affected by the cancellation effort was not immediately specified. Emphasizing the initiative's benefits, Biden pointed out its advantages for community college attendees, low-income borrowers, and those struggling with loan repayment.
"This action will particularly help community college borrowers, low-income borrowers, and those struggling to repay their loans," the president said in a statement.
This move aligns with the administration's continuous efforts to reduce student loan debt.
Federal Student Loan Repayments
After a halt of more than three years, many borrowers started repaying federal student loans in October. Last year, the Supreme Court rejected the pandemic-era debt relief plan of Joe Biden. This plan aimed to get rid of up to $20,000 in student debt for some 43 million borrowers.
In his statement, Biden cited the administration's efforts to "pursue an alternative path," which he said had already canceled student debt for 3.6 million individuals.
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