Biden Administration to Cancel $1.2 Billion of Student Loans

On Wednesday, President Biden stated that his administration is canceling $1.2 billion of student loans for around 153,000 people.

Let’s read the news and find out more.

Biden Administration to Cancel $1.2 Billion of Student Loans

The recent announcement is intended for a particular set of long-term borrowers with $12,000 or less who have been repaying the money for at least 10 years and are engaged in the much-discussed repayment plan of the Biden administration, known as Saving on a Valuable Education (SAVE).

The SAVE plan modifies monthly payments based on the incomes of the borrowers and family size to settle the money while making sure it doesn’t gain unpaid interest.

This move brings the overall debt cancellation amount Biden has authorized for almost 4 million Americans to $138 billion.

Following the Supreme Court’s June blocking of his more comprehensive plan to cancel $430 billion in student loan debt, Democratic candidate Joe Biden promised to explore other debt-relief options last year.

This Wednesday, during a three-day campaign fundraising trip on the West Coast, President Joe Biden said, “If you qualify, you’ll be hearing from me shortly,” at a public library in Culver City, California.

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As per the Education Department, qualified debtors will begin to receive their debt forgiven in the next few days.

The White House started supplying those borrowers with notices bearing the president’s signature, and the agency stated that loan providers would handle the relief and the qualified borrowers wouldn’t need to take any further action.

The agency also declared that it will keep track of and terminate the federal loans belonging to borrowers who satisfy the requirement “on a regular basis.” Currently, only enrolled SAVE borrowers will be eligible for the forgiveness.

However, the administration announced that it would begin emailing eligible borrowers the next week if they want to register for the program.

The move aims to gain the support of young people and left-leaning progressives who have advocated student loan forgiveness.

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Studies reveal that politicians who fulfill their promises of reducing student loan debt are typically bound to gain the support of younger voters and Democrats support.

Biden is using the Student Loan Forgiveness Program as a political strategy to seek reelection in November.

Meanwhile, the White House has been releasing debt forgiveness news. Biden and his team are moving forward despite all the legal challenges and Republicans’ strong opposition to this action. Republicans have fiercely criticized the president’s efforts to reduce student loan debt.

A Republican from Louisiana declared, “This is unfair, manipulative, and a cynical attempt to buy votes.”

According to Biden, the debt relief will be “a huge help to graduates of community college and borrowers with smaller loans, putting them back on track faster for debt forgiveness than ever before.”

As stated in the note that the White House released, Biden stated, “I hope this relief gives you a little more breathing room.”

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He added, “I’ve 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.”