Here’s Who Will Benefit From Biden’s $7.4 Billion in Student Loan Forgiveness

Borrowers will receive an email from the Department of Education starting Friday informing them of the changes.

Here’s Who Will Benefit From Biden’s $7.4 Billion in Student Loan Forgiveness
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More than 275,000 borrowers enrolled in Saving on a Valuable Education (SAVE), public service loan forgiveness (PSLF), and others who benefit from previously announced income-driven repayment plan adjustments will see student debt relief amounting to $7.4 billion applied on their accounts, the Biden Administration announced Friday.

The decision comes on the heels of a separate announcement of the Administration’s broader student loan forgiveness program that would replace the plan the Supreme Court struck down last June. The scope of that debt relief would affect tens of millions of borrowers. 

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“Today’s announcement shows—once again—that the Biden-Harris Administration is not letting up its efforts to give hardworking Americans some breathing room,” U.S. Secretary of Education Miguel Cardona said in a statement. “As long as there are people with overwhelming student loan debt competing with basic needs such as food and healthcare, we will remain relentless in our pursuit to bring relief to millions across the country.”

Borrowers will receive an email from the Department of Education starting Friday informing them of the changes to their account. 

Here’s who it will help: 

$3.6 billion to SAVE borrowers

The student debt relief announced Friday will wipe out $3.6 billion in debt for 206,800 borrowers. “This relief will go to borrowers who are enrolled in the SAVE Plan who had smaller loans for their postsecondary studies,” according to a press release from the Department of Education. Borrowers who have made 10 years of payments and borrowed $12,000 or less will see the aid. For each additional $1,000 a borrower took out in loans, they will need to wait another 12 months to see that amount forgiven. 

The relief will be based on a borrower’s original principal balance, not what a borrower currently owes, per the Education Department. 

$3.5 billion through income-driven-repayment plan adjustments 

Another $3.5 billion will be erased from the accounts of borrowers who benefit from the adjustments made to the income-driven repayment plan. Borrowers enrolled in an income-driven repayment plan can see their debt forgiven after 20 or 25 years of payments, depending on their loan. That adjustment, which was initially rolled out in 2022, reviews borrowers’ accounts and gives them credit for making partial and late payments. 

$300 million for 4,600 Public Service Loan Forgiveness borrowers 

More than 4,500 borrowers enrolled in the public service loan forgiveness plan will also see forgiveness. The debt relief is part of the Biden Administration’s larger effort to fulfill their previous campaign promise of student loan forgiveness.

“Today we are helping 277,000 borrowers who have been making payments on their student loans for at least a decade,” said U.S. Under Secretary of Education James Kvaal in a press release. “They have paid what they can afford, and they have earned loan forgiveness for the balance of their loan.”