President Joe Biden on Friday announced the latest round of student debt cancellations in a statement issued by The White House.
Since the Supreme Court’s ruling on June 30 in Biden v. Nebraska that the administration’s plan to cancel up to $10,000 in student debt for all borrowers was unlawful, the administration has sought to pursue other debt cancellation measures, most notably through the Saving on a Valuable Education (SAVE) plan, which was finalized by the Department of Education (DOE) on the day of the court’s ruling.
Biden said that borrowers enrolled in the SAVE plan who borrowed less than $12,000 in debt, and who have been in repayment for at least ten years, will have their balances canceled by February.
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“This action will particularly help community college borrowers, low-income borrowers, and those struggling to repay their loans,” Biden wrote. “[I]n the wake of the Supreme Court’s decision on our student debt relief plan, we are continuing to pursue an alternative path to deliver student debt relief to as many borrowers as possible as quickly as possible.”
Biden’s SAVE plan caps student loan repayments at 5% of discretionary income every month for undergraduate borrowers, with some borrowers eligible to make $0 in monthly payments. “Already, 6.9 million borrowers are enrolled in the plan, and 3.9 million have a $0 monthly payment,” reads the White House’s press release.
Conservative groups have criticized student loan forgiveness programs as redistributionist since college-educated borrowers, which are a large Democratic-voting block, are being relieved of repaying loans funded by taxpayers, which include individuals without a college education.
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Biden’s SAVE plan was almost immediately challenged in court by a coalition of conservative and libertarian groups, with the case pending at the U.S. District Court for the Eastern District of Michigan.
Since Biden assumed office on Jan. 20, 2021, over 3.6 million borrowers have received some form of debt forgiveness, according to the announcement. The forgiveness amounts to $132 billion, according to the White House.
Additionally, the administration has sought regulatory changes to how individuals with student debt may access government services, such as affordable housing. “We know debt disproportionately impacts Black and Brown people in this country. That is why we introduced changes to how potential homebuyers’ rental history is considered, and how their student loan debt is calculated so more people can qualify for affordable housing financing,” wrote Housing and Urban Development Secretary Marcia Fudge on Twitter, now known as X.
Student debt repayments, which were suspended during the COVID-19 pandemic, resumed in October of 2023, with 8.8 million borrowers missing their first payment.
“This is a great step. Next: let’s cancel all student debt,” wrote Democratic Rep. Melanie Stansbury of New Mexico on Twitter, about Biden’s announcement.
Senate Majority Leader Chuck Schumer and Democratic Sen. Elizabeth Warren of Massachusetts, on Twitter also applauded the decision.
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