President Joe Biden announced Wednesday his administration is cancelling $1.2 billion of student debt for thousands of Americans months after the Supreme Court struck down previous efforts.
The president moved to automatically cancel the student debt of 153,000 Americans who were eligible under Biden’s Saving on a Valuable Education (SAVE) repayment plan, which was unveiled in 2023. The Supreme Court ruled 6-3 in June 2023 to block the Biden administration’s plan to grant student loan forgiveness to nearly 40 million Americans using executive power.
“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,” Education Secretary Miguel Cardona said in a press release. “Under President Biden’s leadership, our Administration has now approved loan forgiveness for nearly 3.9 million borrowers, and our historic fight to cancel student debt isn’t over yet.”
After Biden’s decision, borrowers who have been working on repaying their loans “after as little as 10 years” and took out $12,000 or less for higher education will be forgiven, the press release stated.
Using executive action, the Biden administration said they have now cancelled $138 billion in student loan forgiveness for nearly 3.9 million borrowers.
Biden previously announced his plan in August 2022 to cancel up to $10,000 in student loan debt for non-Pell Grant recipients and up to $20,000 for Pell Grant recipients using the 2003 HEROES Act. Under the legislation, the Secretary of Education has the ability to “waive or modify” provisions of student financial assistance programs during a national emergency to ensure recipients are “not placed in a worse position financially.”
“This shortened time to forgiveness 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 press release stated. “Under the Biden-Harris Administration’s SAVE plan, 85 percent of future community college borrowers will be debt free within 10 years. The Department will continue to regularly identify and discharge other borrowers eligible for relief under this provision on SAVE.”
