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Move will forgive debts of people who borrowed $12,000 or less and have been repaying the money for at least 10 years.
Published On 22 Feb 2024
US President Joe Biden has said that his administration was cancelling $1.2bn worth of student loans for almost 153,000 people.
Biden, who is undertaking a three-day campaign swing through California, made the announcement on Wednesday as part of a new repayment plan that offers a faster path to forgiveness.
The US leader had last year pledged to find other avenues for tackling debt relief after the Supreme Court blocked a broader plan to forgive $430bn in student loan debt.
“While a college degree is still a ticket to a better life, that ticket is too expensive,” Biden said in a statement.
“And too many Americans are still saddled with unsustainable debt in exchange for a college degree.”
The latest announcement applies to people enrolled in a repayment programme known as Saving on a Valuable Education (SAVE) and covers those who borrowed $12,000 or less and have been repaying the money for at least 10 years.
The move will “particularly help community college and other borrowers with smaller loans and put many on track to being free of student debt faster than ever before,” the White House said.
The Biden administration began sending email notifications on Wednesday to some of the borrowers who will benefit from the SAVE programme.
The cancellations were originally scheduled to start in July, but last month the administration said it would be ready almost six months ahead of schedule, in February.
The first round of forgiveness from the SAVE plan will clear $1.2bn in loans.
The borrowers will get emails with a message from Biden notifying them that “all or a portion of your federal student loans will be forgiven because you qualify for early loan forgiveness under my Administration’s SAVE Plan”.
In his email to borrowers, Biden will write that he heard from “countless people who have told me that relieving the burden of their student loan debt will allow them to support themselves and their families, buy their first home, start a small business, and move forward with life plans they’ve put on hold”.
More than 7.5 million people have enrolled in the new repayment plan.
Left-leaning progressive and young voters, whose support Biden needs to win re-election in November, have been vocal in advocating for student loan forgiveness on a wide scale. Republicans largely oppose such actions.
The White House said Biden’s administration has now cancelled some $138bn in student debt for nearly 3.9 million people through executive actions.
