By Stacy M. Brown, NNPA Newswire Senior National Correspondent
On Wednesday, Dec. 6, the Biden administration declared that it would erase an extra $4.8 billion of 80,300 students’ student loan debt. The U.S. Department of Education’s adjustments to its Public Service Loan Forgiveness program and income-driven repayment plans have resulted in the alleviation.
U.S. Secretary of Education Miguel Cardona stated in a statement that “before President Biden took office, it was virtually impossible for eligible borrowers to access the student debt relief they rightfully earned. “This level of debt relief is unparalleled, and we have no intention of slowing down,” Cardona said.
Approximately $2 billion of the assistance will be allocated to almost 46,000 individuals who are currently participating in income-driven repayment programs. According to experts, loan servicers frequently neglected to monitor borrowers’ payments, resulting in the failure of the intended debt forgiveness schemes after a specified time frame.
The U.S. Department of Education announced that 34,400 debtors who have been in public service for ten years or longer will be granted loan cancellation of $2.6 billion. Participants in the Public Service Loan Forgiveness program have had difficulties in obtaining the promised debt cancellation due to inaccuracies in their payment calculations and other related problems.
The Biden administration has recently eliminated around $132 billion in student debt for over 3.6 million American individuals. The Biden-Harris campaign expects their relentless pursuit of forgiving student loans will aid them in the polls as voters support measures that forgive student debt by a 2-to-1 margin.
Despite the Supreme Court striking down the administration’s earlier plan to offer as much as $20,000 in loan forgiveness to borrowers, Biden has relentlessly pursued other avenues to meet his campaign promise.
“From Day One of my Administration, I vowed to improve the student loan system so that a higher education provides Americans with opportunity and prosperity – not unmanageable burdens of student loan debt. I won’t back down from using every tool at our disposal to get student loan borrowers the relief they need to reach their dreams,” the president insisted.
Biden said the relief is courtesy of his administration’s efforts to fix Public Service Loan Forgiveness, so teachers, members of the military, nurses, and other public service workers receive “the relief they have earned.”
“And it’s because of actions my administration took to make sure that borrowers who have been in repayment for at least 20 years – but didn’t accurately get credit for student loan payments – get the relief they are entitled to,” Biden asserted, noting that the latest move brings the total debt cancellation his administration has approved to $132 billion for over 3.6 million Americans through various actions.
“Today’s announcement comes on top of all we’ve been able to achieve for students and student loan borrowers in the past few years,” Biden stated. “This includes achieving the largest increases in Pell Grants in over a decade to help families who earn less than roughly $60,000 a year; fixing the Public Service Loan Forgiveness program so that borrowers who go into public service get the debt relief they’re entitled to under the law; and creating the most generous Income-Driven Repayment plan in history – the SAVE plan.
“Borrowers can go to studentaid.gov to apply. And, in 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.”
Tag: U.S. Secretary of Education Miguel Cardona
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Newswire : Biden announces $4.8 billion in Student Loan Debt Forgiveness for 80,300 Borrowers
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Newswire : Nearly 5.5 million borrowers lower student loan payments with SAVE Plan – 2.9 million borrowers reduce monthly payments to $0
By Charlene Crowell
(TriceEdneyWire.com) – Nearly 5.5 million borrowers have applied for the newest federal program for student loan debt relief since it was announced about three months ago. Nearly 3 million borrowers who enrolled in the Saving on a Valuable Education (SAVE) Plan completely eliminated their monthly loan payments.
“Under President Biden, the Department created the SAVE Plan so that young people and working families can climb the economic ladder without unaffordable student loan debt weighing them down,” said U.S. Secretary of Education Miguel Cardona. “I’m thrilled to see that in less than three months, nearly 5.5 million Americans in every community across the country are taking advantage of the SAVE Plan’s many benefits, from lower monthly payments to protection from runaway student loan interest.”
The bulk of these loan savings benefit students with the greatest financial need – those eligible for federal Pell grants – including Black, Latino, Native American and Alaskan Native borrowers. Most SAVE borrowers will see their lifetime loan repayments cut in half.
As long as SAVE participants maintain their regular payments, their loan balances will go down due to the Education Department no longer charging interest.
Further, the SAVE program creates lower payment rates for both undergraduate and graduate loans. Required payments for undergraduate loans will be cut in half to five percent from the previous 10 percent. Borrowers who incurred both undergraduate and graduate loans, under SAFE, will now pay a weighted average of the original principal balances on their loans. The payment range for the combination borrowers is from 5-10 percent of income.
The $0 payment remains available for borrowers who earn less than $32,800 per year or those in a family of four making less than $67,000. Borrowers earning more than these annual amounts also benefit with an estimated savings of $102 a month ($1,224 a year), compared to earlier income-driven repayment programs.
Geographically, every state and congressional district has SAVE participants. California and Texas each have more than 450,000 borrowers enrolled in SAVE, while congressional districts in Missouri, Ohio, and Michigan have the highest identified enrollment.
Consumer advocates are emphasizing the program’s targeted reach.
For example, this October, the Urban Institute, a nonpartisan research and policy organization noted, “Payment reductions and larger loan forgiveness benefits under the SAVE plan will occur broadly across racial and ethnic groups but are skewed toward programs enrolling more Black and Hispanic students.”
Even earlier this year, the Center for Responsible Lending (CRL) stressed to the House Subcommittee on Higher Education and Workforce Development how the escalating costs of higher education surpassed the financial capabilities of many Americans.
“Education was sold to working-class families as the great equalizer, giving unlimited opportunity to those who would seize it” wrote CRL. “Yet, according to the Federal Reserve, every $1,000 increase in student loan debt lowers the national homeownership rate by about 1.8 percentage points for public 4-year college students.”
“Between 2009 and 2022, median household income grew from $63,011 to $70,784, or about 12 percent,” CRL continued. “Comparatively, the average student loan debt grew nearly 32 percent, from $27,874 to $36,096, during that period.”
Student loan borrowers who have financially struggled to keep up with monthly payments may still enroll online at: https://studentaid.gov/announcements-events/save-plan.
“The SAVE Plan will significantly cut monthly bills for most borrowers, reduce loan default, and ensure that students loans don’t need to come before life necessities,” said Under Secretary James Kvaal. “With nearly 5.5 million people enrolled after only two months, it’s clear how much borrowers need a plan like SAVE. President Biden and our Administration remain committed to giving borrowers breathing room on their monthly payments and ensuring student loans aren’t a barrier to opportunity.”
Charlene Crowell is a senior fellow with the Center for Responsible Lending. She can be reached at Charlene.crowell@responsiblelending.org.