An email went out this morning to some student loan borrowers basically saying, you’re debt free.
On Wednesday, the federal Education Department zeroed out loan balances for nearly 153,000 borrowers. They are people who borrowed $12,000 or less, have been paying their student loans for at least 10 years, and enrolled in the Biden administration’s new repayment plan called SAVE launched last summer.
“We’re providing debt relief to people who need it the most,” said Education Secretary Miguel Cardona on Wednesday in an interview on NPR’s Morning Edition. “We’re also addressing the root cause of the issue, which is, the cost of college is out of control,” Cardona said.
The Saving on a Valuable Education (SAVE) repayment plan has become a key vehicle for President Biden and Secretary Cardona since the Supreme Court last year struck down the administration’s plan to forgive hundreds of billions of dollars in federal student loan debt.
Republican lawmakers have tried to stop the SAVE plan, arguing that it is outside of the administration’s authority and criticizing the president for campaigning for votes with the new policy.
Wednesday’s debt cancellation announcement comes after a shaky rollout of the new FAFSA application resulting in a delay of student aid award letters, along with people unable to fill out the form.