Joe Biden Administration Announces $7.7 Billion Student Loan Debt Relief, Know Who Are Eligible?
The Biden Administration has recently announced a fresh round of student loan relief to tackle the ongoing loan crisis. The student loan debt in the US stands at a staggering $1.6 trillion, and millions of borrowers are struggling to pay back their loans. The $7.7 billion student loan debt relief will go a long way in alleviating this crisis. Read on to know how to avail of this latest sop from the Biden administration.
It is not the first time that the Joe Biden Administration has brought forth a loan forgiveness program. It had proposed a scheme in 2023, but the US Supreme Court had rejected the scheme. However, the Biden Administration did not budge from its endeavor and remained committed to aiding student loan borrowers.
One such scheme was the Saving on a Valuable Education (SAVE) Plan, which was open to borrowers who initially borrowed $12,000 or less. They had an opportunity to have their loans waived if they had repaid for ten years.
Joe Biden Administration Unveils $7.7 Billion in Student Loan Debt Relief
The Joe Biden Administration has unveiled an additional $7.7 billion in loan debt relief, and more than 160,500 borrowers could benefit from the latest scheme. Adding the latest debt relief, the total amount of debt relief reached $167 billion, and as per the figures released by the Department of Education, it will benefit more than 4.75 million student loan borrowers or 1 in 10 borrowers.
The relief program can be availed by three categories of borrowers:
- $5.1 billion has been earmarked for 66,900 borrowers who come under the purview of Public Service Loan Forgiveness (PSLF), people working in the public service or nonprofit sector.
- $613 million has been earmarked for 5,4300 borrowers who signed up for President Joe Biden’s SAVE Plan and have been repaying for the last 10 years and have borrowed less than $12,000.
- $1.9 million has been earmarked for 39,300 borrowers receiving forgiveness on income-driven repayment (IDR) plans.
Undergraduates will get some extra benefits in July when the changes in the percentage the borrower pays every month based on their income become effective.
Presently, borrowers under the SAVE Plan pay 10% of their discretionary monthly income, which is calculated as the difference between adjusted gross income and an income that is 225% of the federal poverty line. As per benchmarks in 2024, this has been fixed at $15,060 a year for a single person, according to the Department of Health and Human Services. Therefore, 225% of the federal poverty line for a one-person household is $33,885.
The latest measures are designed to alleviate the financial woes of borrowers who are finding it difficult to repay their student loans. The eligible borrowers will be notified via email in the coming weeks. The emails will contain details of the actual balance and account adjustments they are entitled to. Undergraduate loan borrowers will also get the benefits of the modifications that have been made in the SAVE Plan. Enrollment in a SAVE Plan can be done online via studentaid.gov/idr.
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