Biden Administration Erases $1.2B Student Debt

( – On Wednesday, February 21, the Biden administration approved the cancellation of another $1.2 billion in federal student loan debt. This latest action brings the total amount of debt forgiven under President Biden to nearly $138 billion, exceeding any other president in history.

The latest tranche of relief targets borrowers participating in the administration’s Saving on a Valuable Education (SAVE) program, specifically those who took out $12,000 or less and have been making payments on time for at least ten years. However, borrowers with initial debts between $12,000 and $20,000 can still qualify for full forgiveness by making additional years of consistent payments.

A White House press release said that the action showed the Biden-Harris administration’s commitment to making higher education more affordable and accessible, especially for community college students and borrowers with smaller loan balances. The press release also said that this would not only give borrowers immediate financial relief but also help many get out of debt sooner.

The administration sees the early implementation of the SAVE program’s forgiveness provision, initially planned for July, as a sign of its dedication to student loan reform. They also said the program is expected to ensure that 85% of future community college graduates leave school debt-free within a decade.

However, Republicans were quick to criticize the announcement, arguing that such broad-based forgiveness plans are unfair to taxpayers and contribute to rising costs of higher education. They point to the administration’s bypassing Congressional approval as another example of executive overreach.

On the other hand, the administration says that its piecemeal approach, which is necessary because the Supreme Court recently blocked a more comprehensive forgiveness plan, is essential to “fixing the broken student loan system” and ensuring that education remains a pathway to financial security.

The $1.2 billion cancellation follows another significant debt relief effort in January when the administration cleared over $5 billion for 74,000 borrowers. This continued focus on student loan forgiveness has emboldened some borrowers, as shown by an survey that found that millions are now withholding payments in anticipation of further federal action.

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