Biden cancels another $1.2 billion in student loans
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The Biden administration approved another $1.2 billion in student loan forgiveness for nearly 153,000 borrowers on Wednesday.
The big picture: The administration has now provided almost $138 billion in relief for more than 3.9 million student borrowers, finding workarounds after the Supreme Court blocked President Biden's signature student loan forgiveness plan last year.
Details: The latest round of relief is for borrowers enrolled in the SAVE repayment plan, who have been making payments for at least 10 years and originally took out $12,000 or less in loans for college, per the Department of Education.
- For every $1,000 borrowed above $12,000, a borrower can receive forgiveness after an additional year of payments, the department said.
Of note: All borrowers who are enrolled in the SAVE program can receive forgiveness after 20 or 25 years, depending on whether they took out loans for graduate school.
- The benefit is not based on the amount a borrower currently owes or the amount of an individual loan. Rather, it's based on the original principal balance of all federal loans borrowed for schooling.
Where it stands: Those who qualify for this round of forgiveness will receive an email from President Biden this week informing them of the action.
- Servicers will process the forgiveness in coming days and borrowers should see their loans forgiven on their accounts, the department said.
- Next week, the Education Department will start emailing borrowers who can become eligible for this type forgiveness if they switch to the SAVE program.
What they're saying: "With today's announcement, we are once again sending a clear message to borrowers who had low balances: if you've been paying for a decade, you've done your part, and you deserve relief," U.S. Secretary of Education Miguel Cardona said in a statement.
- "Our historic fight to cancel student debt isn't over yet," he added.
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