Current US President Joe Biden, who is seeking re-election this year, announced on February 21, 2024, that his government is canceling $1.2 billion worth of student loans for nearly 153,000 borrowers.
President Biden is fulfilling a promise he made earlier to increase loan forgiveness.
President Joe Biden, who is a Democrat, had last year promised to look for other means to tackle debt relief, especially after the Supreme Court in June 2023 blocked his broader plan to cancel $430 billion in student loan debt.
Joe Biden has been very vociferous in advocating for student loan forgiveness on a wide scale. During a trip to California, where he was primarily for fundraising, he said that a college degree was a ticket for a good life but the ticket is too expensive.
Biden also added that the latest sops will be a huge fillip for graduates of community colleges and borrowers with smaller loans, putting them back on track faster for debt forgiveness than ever before. As per a statement from the White House, the present administration has now canceled some $138 billion in student debt for nearly 3.9 million people through executive actions.
The latest relief will be applicable for people enrolled in a repayment program titled ‘Saving on a Valuable Education (SAVE).’ It covers people who have borrowed less than $12,000 and have been repaying the money for at least 10 years.
The ‘Saving on a Valuable Education (SAVE)’ is designed to take into account a debt holder’s income and family size when setting monthly payments. It also ensures that balances do not increase from unpaid interest if the borrowers are making regular payments.
Recipients of the relief will receive an email from Biden which is as follows-
“I hope this relief gives you a little more breathing room. I’ve heard from countless people who have told me that relieving the burden of their student loan debt will allow them to support themselves and their families, buy their first home, start a small business, and move forward with life plans they’ve put on hold.”
The President’s debt relief program has evoked mixed responses. While some have hailed the debt relief program, in which the administration has forgiven about $138 billion in student loans for 3.9 million people using the existing relief programs, they are asking for a more sweeping loan forgiveness plan, something the Supreme Court has rejected.
On the other hand, the Republicans have dubbed the current exercise as one that comes at the expense of other taxpayers, many of whom never attended college.
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