President Joe Biden expanded his push to eliminate student loan debt Wednesday, saying during a speech the initiative is part of a campaign promise to address the “broken” system.
“While a college degree is still a ticket to a better life, that ticket is too expensive,” Biden said. “And too many Americans are still saddled with unsustainable debt in exchange for a college degree.”
Biden, who made his remarks while on a trip to California that also included fundraising for his 2024 campaign, argued that canceling student loan debt not only helps those who receive the benefit directly, but those in their communities.
“When people’s student debt is relieved, they buy homes, they start businesses, they contribute, they engage in the community in ways they weren’t able to before and it actually grows the economy,” Biden said.
The latest round of student debt forgiveness includes nearly 153,000 borrowers and a total of $1.2 billion in debt, according to a fact sheet from the White House.
Those receiving loan forgiveness are enrolled in the Saving on a Valuable Education or SAVE repayment plan, have been paying back their loans for at least 10 years and originally took out less than $12,000 in loans.
This week’s actions bring total student loan cancellation by the Biden administration to $138 billion for nearly 3.9 million people, according to the fact sheet.
Repayments tied to income, family size
The so-called SAVE Plan allows borrowers to set their student loan repayments based on their income and family size, not the amount of student loan debt they hold.
“The SAVE plan ensures that if borrowers are making their monthly payments, their balances cannot grow because of unpaid interest,” according to the White House’s fact sheet. “And, starting in July, undergraduate loan payments will be cut in half, capping a borrower’s loan payment at 5% of their discretionary income.”
Education Secretary Miguel Cardona said on a call with reporters Tuesday there are about 7.5 million people enrolled in the SAVE Plan and that 4.3 million don’t have a monthly payment.
“Many SAVE forgiveness recipients come from lower- and middle-income backgrounds,” Cardona said. “Many took out loans to attend community colleges. Some were at high risk for delinquency and default. That’s why the actions we’re announcing today do matter.”
Cardona said those eligible for this round of student debt cancellation would receive an email from Biden telling them about the move.
New FAFSA rollout criticized
Louisiana Republican Sen. Bill Cassidy said in a written statement the latest round of student loan forgiveness is misguided.
