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The Biden administration has announced that certain student loan borrowers will see their remaining debt canceled as early as next month.
This decision, part of the “Saving on Valuable Education (SAVE) plan,” applies to borrowers who have taken out less than $12,000 in loans and have been consistently repaying for ten years. The debt cancellation, initially scheduled for July, is now set for February, arriving five months ahead of the original timeline.
While the administration has not specified the exact number of beneficiaries, it stated that the primary recipients would be low-income individuals, those facing difficulties in loan repayment, and community college attendees. President Biden emphasized the initiative’s aim to alleviate the financial burden, saying, “It’s part of our ongoing efforts to act as quickly as possible to give more borrowers breathing room so they can get out from under the burden of student loan debt, move on with their lives and pursue their dreams.”
The move, however, faces criticism from Republicans who have consistently opposed Biden’s debt relief measures. House Education Committee Chair Virginia Foxx (R-NC) accused the administration of fiscal irresponsibility, likening it to “spend[ing] like a drunken sailor.” She criticized the approach as a desperate attempt to garner votes and mishandling the student debt crisis.
The SAVE plan includes a graduated relief structure: for every additional $1,000 borrowed above $12,000, an extra year is added to the repayment period, with a cap of 20 years for undergraduate and 25 years for graduate loans. Other parts of the SAVE plan, such as reducing payments from 10 percent to 5 percent of discretionary income, are set to take effect in July.
Since its implementation last year, the SAVE plan has seen significant participation, with nearly 7 million people enrolled. Among them, almost 4 million are benefiting from $0 monthly payments.
