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

By Zack Geist, Founder of Student Loan Tutor
April 16, 2024

The Biden Administration revealed on Friday April 12th that over 275,000 borrowers enrolled in programs like Saving on a Valuable Education (SAVE), public service loan forgiveness (PSLF), and those benefiting from previously announced adjustments to income-driven repayment plans are set to receive substantial student debt relief totaling $7.4 billion.

This announcement follows another significant declaration regarding the Administration's broader student loan forgiveness program, which aims to replace the plan invalidated by the Supreme Court last June. The impact of this debt relief is expected to reach tens of millions of borrowers.

Beginning Friday, affected borrowers will receive emails from the Department of Education notifying them of the adjustments to their accounts.

Here's a breakdown of who will benefit from this relief:

$3.6 billion for SAVE borrowers

This portion of student debt relief will eliminate $3.6 billion in debt for 206,800 borrowers enrolled in the SAVE Plan. According to a press release from the Department of Education, this relief targets borrowers with smaller loans for their postsecondary studies. Eligible borrowers who have made payments for 10 years and have borrowed $12,000 or less will see their debt forgiven. For each additional $1,000 borrowed, borrowers will need to wait an additional 12 months to qualify for forgiveness. The relief will be based on the borrower's original principal balance rather than their current outstanding debt.

$3.5 billion through income-driven repayment plan adjustments

An additional $3.5 billion will be forgiven for borrowers benefiting from adjustments made to income-driven repayment plans. These plans allow borrowers to have their debt forgiven after 20 or 25 years of payments, depending on their loan. The adjustments, introduced in 2022, review borrowers' accounts and credit them for partial and late payments.

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

Over 4,500 borrowers enrolled in the public service loan forgiveness plan will also receive debt relief. This initiative is part of the Biden Administration's broader commitment to fulfilling its campaign promise of student loan forgiveness. U.S. Under Secretary of Education James Kvaal highlighted the significance of assisting 277,000 borrowers who have diligently made payments on their student loans for at least a decade, underscoring their eligibility for loan forgiveness on the remaining balance.

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